The American consulting firm A.T. Kearney has found that a similar rule applies to with offshoring: you don't achieve savings by focusing on cost-cutting; it's a byproduct of targeting better performance.
Like the Forrester study of captive outsourcing centers, Kearney studied a small group of companies: Just 42 Fortune 500 multinationals -- the type that ought to have the most success with offshoring because of their management depth and clout with Tier 1 offshore companies.
AT Kearney's study looked not just at IT outsourcing, but other kinds too, including business process outsourcing.
As we found in our March '07 outsourcing study, large companies in general tend to save money by offshoring. However, the results are uneven: although as a group they saved 44 percent by offshoring, 34 percent failed to save as much as expected. And 60 percent missed their operational performance targets.
