Outsourcing - Management must adapt to this growing phenomenon

Offshore outsourcing of traditional IT work is anticipated to grow 20 to 25 percent each year in the next few years. The obvious reason is to reduce operating costs – by up to 50 percent in some cases. Other benefits include improved quality among offshore providers to offer flexibility and 24x7 operating hours. Analysts warn that internal management costs can offset some of the savings of offshoring. Experts agree that IT departments will still need senior managers who understand strategy, culture and industry-specific processes. One of the major outsourcing barriers cited is a lack of proper governance structures and performance measures. Typically, organizations have only one or two individuals managing their outsourced projects. Going forward, CIO's will need to craft stronger, metrics-driven partnership models with service providers.