IT Outsourcing

IT outsourcing became more widespread as more and more businesses began looking for ways to cut costs. Many businesses considered IT – internet technology – to be outside their core competency, which eased the decision to let someone else do it. What does the IT outsourcing landscape look like today?

According to, the top three IT outsourcing companies in the world are IBM, EDS, and Computer Sciences Corp., all U.S. based companies with operations and service centers all over the world.

Leading Outsourcing Countries

India is still the country of choice for many businesses outsourcing their IT operations. reports a tenfold growth in India’s IT outsourcing industry over the past 10 years. And even though its share of the industry is decreasing because of increased competition from countries like China and Russia, India’s outsourcing industry continues to grow.

Some of the same issues still linger, high turnover rates and culture barriers can make work difficult.

As wages increase in India, many companies are looking toward other less-expensive countries for software development and maintenance. Brazil is one of them. Another benefit of doing business in South America is location. It’s close to the U.S. both in terms of geography and in time. Even the larger outsourcing firms are moving to Brazil. IBM has its infrastructure hub in a city outside Sao Paolo.

From a cost perspective, China is a viable option, but language barriers make it difficult to translate technical issues. Language barriers force multiple review cycles and increased development time to ensure a quality software solution. Companies considering outsourcing to China should factor the level of difficulty in communicating before making a final decision. A higher cost may be worth it for a quality solution that’s delivered on time and in-spec.

Choosing an IT Outsourcer

China’s a prime example of why you should look at more than just cost when you’re shopping around for an IT outsourcer. Quality can easily fall to the wayside in your quest for a low price.

Look for an outsourcer that has a proven track record in delivering quality solutions. That new company with the attractive price tag might be tempting, but without past experience, you have little guarantee that you IT needs will be met. You’ll be better served by a company that charges more, but has proven their reliability.

For any outsourced relationship, establish clear goals, objectives, guidelines, and milestones. Document the desired outcome and the method of measuring success.

Outsourcers are becoming more and more specialized. No more are the days when you have to rely on a single company as your one-stop shop for IT needs. You can choose one outsourcer in one country for software development and another outsourcer in another country for infrastructure management and so on. If you choose to outsource this way, you have to become good at managing several different clients, sometimes even across geographic regions and time zones.

Always research an outsourcer thoroughly making a decision to hire them. In fact, you should research several outsourcers and compare them the way you’d comparison shop for a car. It’s the best way to ensure you’re choosing the best company for your IT operations.

Join the discussion

1 comment