Aberdeen Reports Bad Times Are Good For Offshore Software Services.

Business Editors/High-Tech Writers

BOSTON--(BUSINESS WIRE)--Sept. 4, 2002

Faced with Tight IT Budgets, Enterprise Interest in Offshore Service Delivery Grows While the Model Itself Continues to Evolve

Like every other sector of the global IT services industry, offshore software services was hit hard by the combination of the dot.com collapse, the worldwide economic slowdown, and the tragic events of September 11, 2001.

Nevertheless, outsourcing in general and offshore service delivery in particular continue to grow and attract the interest of business and IT decision makers, according to a report just released by the Aberdeen Group, a leading provider of technology market consulting and research. The report, "Offshore Software Outsourcing Best Practices: Building Successful Relationships on a Diverse Delivery Model", indicates that the cost benefits of offshore software service delivery are the number one driver behind the sector's continued growth. Achieving those benefits, however, requires due diligence, a collaborative approach, and flexibility. These findings are based on reviews of more than 60 case studies and interviews with offshore services clients and are detailed in the report, which focuses on enterprises that have successfully established and carried out offshore application initiatives.

The report also notes that although cost management is the primary driver behind most offshore initiatives, internal resource reallocation, 24X7 service delivery, quality, and access to specific skill sets are also reasons why enterprises are making offshore application development, maintenance, and support among the fastest growing and increasingly diverse sectors of the IT services industry.

"Actually, the growing diversity of offshore service delivery is one of the more interesting findings of the research," notes Stephen Lane, Aberdeen's IT Services Research Director. "It shows up not only in terms of the different countries from which software services companies have entered the market, but in the fact that offshore delivery is becoming part of the IT services industry mainstream with global, U.S., and European suppliers increasingly incorporating it into their go-to-market strategies."

In addition, the research indicates that while traditional offshore services such as legacy application maintenance and enhancement predominate, collaborative on-site/offshore initiatives are also growing in popularity as enterprise clients and suppliers build long-term relationships.

The first section of the report describes the summary findings and best practices in offshore service relationship development and governance, which include:

-- Start with a test project using measurable goals and objectives.

-- Ensure internal buy-in and involvement.

-- Review and document internal processes.

-- Assign a dedicated project manager.

-- Pay attention to organizational fit.

-- Document everything.

-- Establish a secure infrastructure.

-- Allow ample time and resources for knowledge transfer.

The second section of the report includes 15 case studies that were selected from the total sample as being particularly notable examples of offshore delivery management and is available from Aberdeen Group. An abridged version of the report can be downloaded from www.aberdeen.com/ab_company/hottopic/offshore2002/default.htm at no charge.

About Aberdeen

Founded in 1998, Aberdeen Group is a leading IT market analysis and positioning services firm that helps Information Technology vendors establish leadership in emerging markets. The firm provides IT market intelligence, positioning, and market acceleration services to established and start-up technology companies.

Aberdeen's consultants provide up-to-the-minute global IT market insights in more than 25 IT market segments. Research practices focus on emerging market opportunities, market growth rates, important industry trends, and customer buying patterns. The firm also helps clients to identify new market opportunities, enter those markets successfully, and accelerate the adoption of new technologies.

Headquartered in Boston, Massachusetts, Aberdeen has research and consulting divisions in Palo Alto, California; Fort Collins, Colorado; and Amsterdam, the Netherlands. Aberdeen is accessible via the Web at www.aberdeen.com.