The mounting cost of IT services puts considerable pressure on the scarce financial and staff resources of Small to Mid-size Businesses (SMBs). This suggests that offshore outsourcing, with its promise of cost reduction, would strongly appeal to SMBs. But less than one in five SMBs currently has an offshore outsourcing strategy in place.
The reason for this is that smaller companies must overcome unique strategic and operational challenges in order to make offshore outsourcing work. These include limited expertise, a shorter planning horizon, and concerns around choosing the right mid-tier vendor. To maximize business benefits, SMBs must not only develop an outsourcing strategy and choose an appropriate vendor, but also build the right management skills, create effective communication channels, and then persevere in the process in order to learn and improve over time. Unfortunately, best practice advice and consulting expertise are largely skewed towards Fortune 1000 companies and often do not apply to smaller firms.
