FUDBusters: Offshore IT Outsourcing Doesn't Match the Hype

A new survey indicates a rapid growth in the use of IT offshore outsourcing services by U.S. companies. But our reader surveys don't support the prediction.

September 23, 2005

1 Min Read
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When: The survey results were published Sept. 15.

FUDFactor: Offshore IT outsourcing is hot, as many U.S. enterprises are moving lower-value IT activities, such as infrastructure management, to other countries. About 42 percent of the 156 companies surveyed outsource some of these activities outside the United States, and another 17 percent say they will do so within the next three years.

FUDBust: Despite all the hoopla surrounding offshore IT outsourcing, we just don't see it happening, at least not broadly. Only 11 percent of respondents in our recent survey of 1,747 Network Computing readers said they are doing any offshore outsourcing, and only 7 percent said they plan to do any in the next 12 months. More than 80 percent said they have no plans to do any offshoring, now or in the future, and that number is virtually unchanged from our 2004 survey. True, our survey focused on enterprises of all sizes, while the Pricewaterhouse survey focused mainly on the largest enterprises. But our numbers for the past two years clearly indicate no stampede toward foreign soil.

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