IT Applications Outsourcing: Key Drivers

In the sourcing world where applications development and maintenance is the prime objective of companies outsourcing IT services, a recent report by the Aberdeen Group finds that companies mainly outsource these services to enhance their internal IT skills. Sixty-two percent of the respondent firms, which outsource such services, state that they do so to enhance internal skills and gain cost arbitrage (See Chart 2).

Interestingly, 46% of the polled companies outsource the majority of their applications development and maintenance services to India, while 30% outsource it within the U.S.A. The research finds that companies that outsource to Indian suppliers are slightly more satisfied with the quality of work than the firms outsourcing to U.S. providers.