Offshoring Loses Luster According to New Survey

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A Genesis10 Survey of Fortune 1000 Executives Finds Strong Preferencefor Onsite Consultants and Domestically Outsourced Teams

As we expected, there is a growing realization that sending work offshore often translates to decreased productivity, security risks and hidden costs that negate intended cost savings

Genesis10, one of the nation’s largest professional technology services and staffing firms, has released the results of a study that found the appeal of offshored IT work has declined significantly in favor of domestic outsourcing strategies. With a tightening labor market, companies are shifting from using offshore sourcing strategies -- which have been almost a default position for realizing labor savings – towards domestic strategies that include contracting with third-parties to staff teams offsite as well as workforce augmentation. In fact, looking forward, only 11 percent are looking offshore to acquire talent while 46 percent are outsourcing domestically.

“As we expected, there is a growing realization that sending work offshore often translates to decreased productivity, security risks and hidden costs that negate intended cost savings,” said Genesis10 CEO Harley Lippman.

The study surveyed 235 executives from Fortune 1000 companies regarding their strategies for optimizing their capabilities in a rapidly modernizing IT arena where they face increased pressure to drive initiatives in areas such as artificial intelligence, cloud computing, business intelligence, blockchain, DevOps, and cybersecurity. Over the past several years, enterprises have invested significantly in acquiring technologies capable of yielding increased operational efficiency, more profitability and higher customer satisfaction. Now they have turned their focus to effectively leveraging these investments in order to implement tech-driven business strategies faster and better than their competition. At the same time, the supply of talent with the necessary skills, experience and training to lead and staff these initiatives is historically tight.

In addition to the offshoring decline, key findings from the Genesis10 study include:

  • Increased interest in staff augmentation. Recognizing that speed is of the essence, 70 percent of the companies surveyed are rounding out their mission critical delivery teams with outside contract workers who can seamlessly integrate into projects and who intuitively understand the relationship between project goals and business impact.
  • Management consultants must prove value. With an emphasis on cost reduction, only 30 percent of the companies surveyed are relying on management consultants, and those that do are looking for strategic insight rather than execution and sustainment work.

“Companies have placed huge bets on IT modernization, and the data is clear,” Lippman said. “With no margin for error and a tight market for talent, there is a critical mass looking outside the enterprise for talent management solutions that allow them to separate from the pack and then maintain market leadership. Staff augmentation, training and domestic outsourcing are proving to be the key ingredients.”

ABOUT GENESIS10
Genesis10 is a professional technology services firm providing staffing, workforce optimization and domestic outsourcing solutions. The company was founded in 1999 and is dedicated to helping organizations implement business and technology initiatives cost-effectively. Genesis10 has more than 170 clients ranging from Fortune 100 to privately-held mid-cap companies in financial services, healthcare, communications, insurance, energy, manufacturing, consumer goods and technology. Based in New York, the company has sales and recruiting offices throughout North America, including six domestic delivery centers. To learn more, please visit: http://www.Genesis10.com

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Josh Berkman
Rubenstein Public Relations
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