Offshore Outsource Savings Can Be Elusive, Survey Shows - ' Rethinking Offshore Outsourcing '

However, by the same token, 30 percent of the engagements generated savings between 1 percent and 20 percent, and the remainder generated savings of 21 percent to as high as 61 percent savings.

The survey also showed that a lot of companies weren't happy with their offshore strategy. Only 45 percent of the executive polled rated their offshore strategy as a success. While 36 percent stated that their offshore strategy had failed.

The results indicate "that we are starting to see that people are starting to move a little bit away" from offshore outsourcing, Hatch said. But that doesn't necessarily mean that corporations are not hiring offshore vendors.

Click here to read why some companies are becoming more selective about the kinds of IT operations they choose to outsource.

Instead, it may be an indication that companies are rethinking their strategies and doing more of a combination of offshore and onshore system development, he said.

Enterprises in the United States and Europe are looking more carefully now at what offshore projects and vendors are most likely to provide the best return investment or the more favorable total cost of ownership, Hatch said.

One in three of the executives who responded said they had to move overseas work back onshore because of problem with their offshore outsourcing strategy.

However, Hatch said that hasn't necessarily turned executives against the concept of offshore outsourcings.

Instead, 73 percent said they would continue to develop a long-term offshore strategy, while 17 percent said they had no plans "to pursue an offshore strategy in the future," and 10 percent were unsure whether they would continue their offshore plans.

The Ventoro report concludes by saying that the responsibility for success or failure of an offshore project rests with the corporate executives who are in charge of planning and implementing it, not the offshore vendor.

Click here to read about former Soviet leader Mikhail Gorbachev's efforts to promote outsourcing in Russia.

The enterprise has to have a clear idea of what it wants to achieve from the offshore project, and the goal shouldn't be just to reduce labor costs. Instead it should be something with the potential to generate a return on investment, improve business processes to lower operating costs, or serve customers better.

There has to be an organizational chart that clearly delineates roles and leadership responsibility between the offshore team and the onshore team, the report concluded. Without this, neither team will have a clear idea of how to meet project objectives.

Finally, enterprises have to recognize that achieving ROI from an offshore outsourcing project won't happen overnight, the report said; they have to be willing to set realistic goals for cost savings and expect that it will take time to realize potential cost savings and ROI.