Valueshore

The article ' A double-edged sword for IT outsourcers'( Information Age, January2010), revealed that cost reduction has become the most important reason to outsource.

Factors such as innovation have been pushed aside as businesses look for a ' quick-win'.

The problem is that this only gives a brief respite for those companies, and offers little benefit to a global outsourcing market trying to prove its worth as budgets become available post-recession.

A key advantage of outsourcing is that you can work with regions that are leading the

Way in a particular industry. This allows companies to benefit from the knowledge base that country offers and put in place the kind of infrastructure and business process that will set them apart from the competition in the long term .The region a company chooses also decides how substantial any savings will be.

Now recent figures from EquaTerra have shown that initial cost savings, not technological upgrade and business transformation is the priority for businesses looking to outsource. This proves that there is still too great a focus on day rates and not enough on the overall benefits of outsourcing.

Companies must start to think strategically the more advanced a company’s business methods, the more sustainable , and indeed substantial , cost savings will be.

As businesses come out of the recession and look again at outsourcing ,it is imperative for the survival of those companies that innovation and value for money become the number one priorities.