Some people might not like the idea but you cannot deny the fact that making over a 60% cost saving by outsourcing IT development tasks to foriegn lands attract a large chunk of US companies to consider offshore outsourcing as their approach to IT solutions. In spite of the in-house resistance to going offshore, US have managed to shift a significant number of IT Jobs overseas. Now UK and Australia are also considering the benefits of going with the offshore model and the trend is in the making

In addition to the cost benefits, shunting tasks such as programming and application migration to foreign lands frees up in-house staff to work on more strategic developments. This gives a boost to the overall business and leaves the business with less botheration. A new survey conducted by the Weiss man Center for International Banking at Baruch College and The Paaras Group (TPG) found that offshore outsourcing (simply called "offshoring" in the survey) is working for many adopters.

The survey canvassed 38 adopter companies (30 from North America and the remainder from Europe), of which over 60 percent were banks and financial services companies. Half of the entire sample space was constituted by companies with more than $5 billion a year in revenues.

Most (85 percent) of these companies are involved in IT offshoring, with 36 percent outsourcing contact centers and 40 percent offsourcing business processes. Although the tendency is to think of offshoring as a relatively recent phenomenon, over a quarter of all surveyed companies have been involved for over six years. There were no offshore call center adopters, on the other hand, who had that length of experience.

Regardless of the offshoring model, the surveyed companies reported an 89 percent satisfaction rate (with 43 percent satisfied "in a major way"). Furthermore, 89 percent also plan to increase offsourcing (65 percent "in a major way"). A total of 93 percent of respondents believe that offshoring has grown, while 61 percent believe that the quality of offshoring has improved.

The survey affirms that the primary (94 percent) motive behind offshoring is cost savings; however, no less than 63 percent of companies said it was about accessing skilled resources and 51 percent cited improving quality.

Specifically, making offshoring work involves setting up a program management office (85 percent) which broader success factors involve knowledge transfer (76 percent) and internal commitment (also 76 percent).

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Globally, companies are becoming increasingly more comfortable with the concept of offshore outsourcing. They can clearly see the benefits. Costs can be up to 60-70% lower but with a minimum of 30-40% cost saving for any model, work quality can be on par with that of local or in-house developers, and risks can be low.