Cambridge, Mass. (Dec. 31, 2003) -- Despite the hype surrounding the mass exodus of IT jobs to cheaper workers overseas, the majority of Fortune 1,000 firms in the U.S. haven’t jumped on the offshore outsourcing bandwagon, according to a report by Forrester Research.

Forrester reported that 60 percent of the U.S.’s top companies aren’t spending any of their IT services budget offshore, and only 5 percent of the Fortune 1,000 are taking full advantage of offshore outsourcing, with offshore spending that ranges from 40 percent to 50 percent of their IT services budgets. According to Forrester, 25 percent of firms are in the experimentation phase -- they have relationships with offshore vendors for small projects but have yet to make it a key element of their IT strategy.

Another 5 percent to 10 percent of Fortune 1,000 companies are using offshore suppliers for more complex applications and mission-critical development services and typically spend 10 percent to 30 percent of their IT services budget offshore, according to the report, “Users' Offshore Evolution and Its Governance Impact.”

Forrester said companies with no overseas experience perceive the issues holding back offshore investment differently than those firms with offshore IT or business process outsourcing expertise. In addition, Forrester said firms in each stage of the outsourcing process have different challenges that require suppliers to address unique security concerns, program management needs, and best practices.

-- WebCPA staff

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