According to Tatvasoft, In a recent survey by diamondcluster international, there is a high increase in the premature termination of the offshore outsourcing software development contracts. Number of satisfied buyers have decreased from 79% to 62%. According to Tom Weakland, it is not right to blame only offshore software development service provider. Although, many buyers are outsourcing their software development work, they still lack quality to get maximum benefits of outsourcing.
This was the third annual study by DiamondCluster and first of its kind where buyers mentioned they are planning to reduce their software outsourcing.
Software outsourcing benefits
To consider the biggest benefit of software outsourcing, companies mentioned reallocation of internal resources to more critical functions. Also, cost saving was another primary reason but it was second in consideration.
Report also mentioned that, companies are learning that, there is no tremendous cost savings. As attrition rate is high in countries like India, companies are also learning cost of losing good people and cost of losing people with specific knowledge.
A report by research and consulting firm Forrester Research mentions that, jobs which are lost in United States because of software outsourcing are primarily low salary IT jobs. These jobs are like software programming or computer support specialists or computer operators. But on the other hand, high end high paying jobs like system analysts, network analysts and research analysts have seen continuous and stronger growth. Jobs in this niche market is growing steadily at the rate of 4 to 5% every year. These jobs which require stronger domain knowledge and knowledge of internal working of IT systems and business process are difficult to software outsource.
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