Survey: US gains favor as outsourcing location

Chief financial officers at technology companies are increasingly seeing the U.S. as their most favored outsourcing destination in 2009, according to a survey by consulting firm BDO Seidman.

Among key findings from the 2009 BDO Seidman Technology Outlook Survey:

• Manufacturing (54 percent) and IT services and programming (46 percent) were the two functions most commonly outsourced offshore;
• 62 percent of CFOs at tech companies say they outsource services or manufacturing;
• 22 percent say that the U.S. is the outsourcing destination most likely to be considered in 2009 followed by China at 16 percent and India at 13 percent;
• 19 percent of those surveyed have no interest in additional outsourcing.

Why the switch? BDO Seidman reckons that the global economic bust, Satyam’s fraud and terrorist attacks are curbing outsourcing in India. Nevertheless, 50 percent of CFOs mention India as their most common non-U.S. location. In China, the big worry is supply chain and shipping costs and the survey reflects those concerns–19 percent cite China as the most common non-U.S. location down from 46 percent a year ago. 

Among those issues, the economic picture appears to be the biggest problem. To wit: 42 percent of CFOs said their companies have operations outside the U.S. compared to 79 percent a year ago. Twenty-nine percent of those CFOs cite economic uncertainty as the main reason they aren’t expanding abroad.