Application Outsourcing is More Than About Saving Money on IT, New Aberdeen Study Finds

Many Companies Outsource to Help Upgrade Internal IT Skills and Seek Third-Party Providers That are Closer to Home

BOSTON, Nov. 13 -- Most companies outsource at least some of their application development or maintenance functions, but saving money is not the prime motivator behind these outsourcing strategies, according to the findings from a new Aberdeen Group benchmark study.

In addition, Aberdeen's research found that a substantial portion of respondents to the survey -- about two of every five -- say their companies would prefer working with service providers that are close to or within the same time zone to allow closer contact with the people they work with regularly.

These and other findings are detailed in a new Aberdeen report, "Outsourcing Application Development and Maintenance."

"While cost savings remain an important cornerstone of many IT outsourcing strategies, most companies, especially in the mid-market, look at outsourcing application work to boost the skills of their internal IT staffs and allow them to tackle more strategic work," says Rick Saia, Aberdeen's Research Analyst for IT services and lead author for the report. Although India has become a popular destination for this work, companies in other nations are ramping up their IT capabilities, affording more options in choosing providers. "This allows companies more 'near shore' options as opposed to looking to the other side of the world," Saia says. "Many large providers recognize this, though, and are looking to perform more work in other countries or at least partner with native firms that can provide these services."

The study found that companies that are best at outsourcing application development and maintenance save more than twice the industry average in application-related costs. They also experience close to 50% higher user satisfaction and -- on average -- a 67% increase in projects delivered on time and within budget.

"Outsourcing Application Development and Maintenance" is underwritten by the following companies: IBM, Softtek, and Unisys. To download a complimentary copy, click here: http://aberdeen.com/link/sponsor.asp?cid=3597

Aberdeen Group, Inc. provides fact-based research and insights focused on the global, technology-driven value chain. Aberdeen's benchmarking, market and solution assessments, sales acceleration programs, and conferences support Global 5000 value chain and technology executives and the solution providers who serve them.

  For more information, visit http://www.aberdeen.com/ or call 617-723-7890.

  Contact:  Rick Saia
  Aberdeen Group
  617-854-5272, rick.saia@aberdeen.com