Costs warning to IT outsourcers

Companies
outsourcing parts of the IT function overseas may not experience any real
savings or cost benefits, a leading IT organisation has warned.

The
Association of Technology Staffing Companies (ATSCo) said many offshoring
projects fail to save money because of the huge set-up costs and training
implications.

According
to ATSCo huge initial investment followed by years of fine tuning means that
few companies achieve the predicted savings.

Despite
cheaper wages (Indian staff are paid £20 an hour compared to £100 in the UK)
the hidden costs for companies include legal fees, poor productivity and the
expensive transitional period.

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Companies
also have the redundancy and retraining costs for the staff left behind in the
UK.

By Ross Wigham