Network advances help companies go offshore

"The offshore provider's networking facilities are a real important consideration - especially in the start-up phase" of an outsourcing relationship, says Nielsen Media Research CIO Kim Ross. "Credible offshore development companies have their own dedicated network facilities in the U.S.," although, he adds, a VPN is a viable alternative.

"Communication costs are an important factor," agrees AMR Research's Lance Travis. "It used to be that only the largest multi-national companies could afford to get started with offshore outsourcing. Today, cheaper, more reliable technology has put it within reach of just about every IT organization. They can't afford not to go offshore."

For application development projects, Travis says, the overseas developer typically receives a copy of the source code and then sends batch updates via the network to the U.S. For ongoing applications support, the servers are located close to where the users are and the overseas administrators logon remotely. "It's a lot more cost-effective for 10 admins to log in than a thousand order-entry clerks," he says.

Voice applications are also benefiting. "Voice compression has come a long way and this helps facilitate call transfers and to lower costs," says Sony Electronics' Maureen Read, vice president and general managers of Customer Information Services Center, who runs a call center in India. "We also use voice over IP to do the same thing and for the same reasons."