Most corporate leaders decide to offshore IT services to cut costs — that’s as true today as it was at the dawn of the offshoring era. But labor arbitrage fades, according to an ongoing offshore outsourcing study researchers are conducting at Duke University. In fact, it disappears after three years.
And when it comes to other oft-cited drivers for shipping IT functions overseas, the benefits may be diminishing as well, researchers at the Center for International Business Education (CIBER) and the International Offshoring Research Network’s (ORN) Project at Duke’s Fuqua School of Business have found.
While 53 percent of corporate leaders surveyed by ORN in 2010 reported that offshoring provided them with better access to qualified personnel, just 40 percent said the same in 2011. And the 46 percent of executives who said offshoring resulted in improved service quality in 2010 decreased to 41 percent last year.