Global delivery strategies: it's not just size that matters

Global sourcing, or offshoring, is rapidly becoming the de facto delivery mechanism for many IT services. The vast majority of the world's leading IT services vendors have now committed strategically to growing their offshore delivery operations, and in the process they are rapidly transforming their businesses.

Western IT services vendors included in this study now have 20-35% of their staff based in low-cost offshore locations. Most expect to grow this significantly, in some cases to 40-50% by the end of this decade. Conversely, Eastern IT services vendors face the challenge of growing both their offshore and onshore resources rapidly, and are increasingly keen to integrate local Western onshore staff into their businesses - both to learn from and to sell better through.

This report discusses the implications of this massive global transformation for IT services vendors. We look at the main implications of the shift towards global sourcing within IT services businesses and consider the operating models that vendors are developing to manage their new global sourcing businesses.

(Note: we use the terms 'global sourcing' and 'offshoring' interchangeably in this report, since the distinction between the two is now less relevant. We also refer to Western and Eastern firms to describe the two different types of businesses in this industry context. 'Western' refers to US and European IT services vendors that have traditionally built their delivery operations in the same region as their clients, and predominately in the Western world. 'Eastern' refers to the newer entrants to the industry that have built their businesses directly from an offshore delivery approach. Typically, these businesses are Indian firms; however, it can include Russian, Chinese, and East Asian and Latin American firms.)