One hundred and four CIOs representing seven countries met and were polled at the 2004 Executive Technology Leadership Forum in Saint Petersburg, Russia on February 4th. The event was sponsored by the CIO Collective and DataArt. Twenty-nine percent of the global CIOs say reducing project costs is the number one reason for outsourcing development projects offshore; and 27 percent cite the number one reason is continued focus on core businesses.
In addition to lower project costs and focus on core business, the survey results show other reasons for outsourcing development projects offshore include a lack of in-house talent able to handle innovative development projects by twenty percent; fifteen percent cited flexibility; and nine percent cited success with outsourcing lesser complex projects.
“Business is borderless,” stated Alister Piggott, chairman of the global executive recruitment firm Morgan Howard.”In this global economy, talent is tapped anywhere. The CIOs that we speak with say they are thinking in terms of global sourcing, not outsourcing. Companies that are insular with self incinerate.”
Outsourcing of technology is spreading far beyond India and Asia. According to Eugene Goland, president of DataArt, a New York-based software developer with offices in Saint Petersburg, London, and Silicon Valley, “Increasingly CIOs from U.S., U.K. and Western European companies are sending development projects to Russia, particularly to Saint Petersburg. It’s a one-two punch for outsourcing to Saint Petersburg. Development can be done there for rates comparable to other offshore development communities and the level of complexity handled here is very high. These highly skilled developers are using agile programming and project management techniques. This is one of the reasons that we chose to locate our development offices in the city.”