Report

February 2003

Unlocking The Savings In Offshore
	Firms that closely manage offshore providers see benefits beyond lower labor costs. To harness the savings, users must make the right governance investments and build up their project management acumen.
by John McCarthy with Nicole Belanger, Laurie Orlov

30% of 145 respondents will use offshore providers in 2003 -- unchanged from 2002.
Offshore firms rate higher in quality than their US counterparts.
Lack of project management skills holds users back.

Users will see benefits beyond lower offshore wages.
Firms need a clear governance model and management mechanisms to make offshore work.

Figure 1. Firms Using Offshore Providers Plan To Spend More In 2003
Figure 2. How Clients Rate Offshore Versus US Providers
Figure 3. Firms Face A Variety Of Offshore Hurdles
Figure 4. Model: Offshore Savings As A Percentage Of Revenue
Figure 5. Examples Of Offshore Vendors And Second-Order Productivity Savings
Figure 6. Top Five Issues Undermining Firms’ Offshore Initiatives
Figure 7. The Appropriate Offshore Governance Structure
Figure 8. Checklist For Managing Offshore Initiatives
Figure 9. Offshore Project Management Check-In Schedule And Participants

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