The Offshoring Transition in Outsourcing

IT departments send their infrastructure labor offshoreskills, and a lot of them now offer a broad range of
primarily to take advantage of lower costs, but therenetwork, help desk, distribution, and application
are other advantages too. The offshoring ofintegration capabilities. They also capitalize on the
infrastructure labor can act as a catalystindustry trend of data migration from old technological
for operational improvements and the implementationbases to latest ones.
of a global operating model that provides more supportMany companies house their infrastructure in local or
to applications and users, no matter where theyregional operations. For this reason, technologies,
operate from.processes, and services are scattered around
Hiring people with the required skillsets is getting easierthe globe, making it harder for
in places such as South Asia, Asia Pacific andinfrastructure companies to support increasingly global
Eastern Europe. Some IT infrastructure technologiesbusiness processes and apps. The opportunity to
are easier to offshore than others: depending on theconsolidate labor in a low-cost offshore center can act
task, companies may be able to offshore from 40 toas a forcing mechanism to consolidate infrastructure
50 percent of the staff in certain areas such asoperations and thus raise service levels for applications
servers or internal help desk. Leading companies thatand users—for example, by providing affordable 24
began moving their internal IT help desk operations and7 support. In addition, some companies that have
UNIX server monitoring, management, and supportalready moved some of their application-development
work to India circa 2004, have seen mammothand business operations offshore find that moving their
savings in unit labor costs of as much as at least 30%.infrastructure staffs as well offers economies of scale
Eyeing this opportunity, vendors have ramped up theirfor facilities, data communications, and training.