Evaluating IT Rural Sourcing and Project Center models and drivers
June 27, 2010
Project-Center based IT Outsourcing alternatives can provide solutions to many of the issues and challenges present in more traditional captive and staff augmentation delivery models.
This whitepaper will provide insight to what alternatives CIO’s and sourcing managers have when it comes to moving IT outsourcing off-site. We will also review what is driving the need for change and what the benefits and challenges are with the various types of Project Center models.
Project Center delivery models have been around for several decades, but have been categorized or called a host of things making it hard for IT leaders and Sourcing Managers to follow the trends. The terms used to describe the various
types have included Offshore, Low Cost Domestic Sourcing – LDC, Near Shore, Rural Sourcing, On Shore and Home Shore.
These types of Project Centers have been included in this report with the objective being to further understand the pros and cons associated with each of them. There are often multiple drivers to outsource, but not all drivers can be considered equal. The business drivers for Project Center IT Outsourcing must be clearly understood and prioritized to insure a good fit with your business drivers and needs.
What is driving the move to Project-Center based Models?
With over 20 years of case studies and offshore IT outsourcing experience now available, we can see the specifics of what works well and what does not work well with this type of Project Center delivery model. The panacea of giving all of your outsourcing work to one or two mega vendors for the best possible labor rate is over, as the limitations of the various offshore and on-site models become more evident.
Objectives for moving to a Project Center based delivery model
There are many benefits available with a Project Center based delivery model. This type of model has evolved as the needs for IT resources have evolved and IT organizations have seen what works and what does not for each specific need.
A 2003 Dunn and Bradstreet survey indicated that 20% to 25% of all IT Outsourcing initiatives fail in the first two years. Another 50% fail within 5 years and identified the reason behind the failed outsourcing contracts as a fundamental mismatch between business drivers and outsourcing choices.
To read the entire white paper download the PDF