Saving Money from Outsourcing Beats Expertise
Cost savings from outsourcing development trump acquiring special expertise,
according to a new survey by Evans Data, a market research firm. Nearly 400
enterprise developers working in companies of 1000 or more employees participated
in the firm’s Summer 2005 Enterprise Development Survey.
Twenty-eight percent of respondents say saving money is their main reason to
outsource, up from 15 percent 5 years ago. In comparison, 19 percent of respondents
outsource development to acquire special expertise, a dramatic reduction from
44 percent 5 years ago.
"Outsourcing once made use of high-level experts to bring particular expertise
to a development project but now we're seeing that outsourcing is much more
likely to be used to save development costs," says John Andrews, Evans
One-third of the survey’s participants indicate they expect to increase
their use of outsourcing next year; only six percent believe they will decrease
their reliance on outsourcing.
"Most companies outsource less than a quarter of their development, most
likely lower level programming tasks that are more cost-effective to outsource
rather than devoting an in-house programmer to such jobs, Andrews says. Only
7 percent of survey participants say they outsource more than 50 percent of
Other findings from the August 2005:
- Sixty one percent of enterprises have increased their IT budgets this year,
up from 53 percent a year ago. Only 10 percent plan to scale back their IT
- Forty nine percent of enterprises and 29 percent of SMBs say they run their
applications for more 5 five years.
- Almost 60 percent of enterprise developers intend to use open source code
in the next year.
- More than half (54 percent) of enterprise developers plan to mobilize business
processes to allow remote access to mission-critical applications in real-time.
Additional results from the survey can be found at www.evansdata.com.