Nearly Half Of U.S. Tech Companies Outsource Offshore

[OhioChick]

But the CFOs surveyed by BDO Seidman are worried about currency risks and uncertain political and business climates overseas.

By Marianne Kolbasuk McGee
InformationWeek
March 3, 2008 01:00 PM


Currency risks and uncertainty about the political and business climate overseas are the top worries of technology industry CFOs regarding their companies' international operations and outsourcing, according to a report released today.

The telephone survey of 100 chief financial officers at U.S. technology companies with annual revenue of $100 million to $15 billion, conducted by accounting and consulting firm BDO Seidman LLP, also found that nearly half (49%) of those business offshore some manufacturing or services outside the U.S.

Nearly eight in ten -- or 79% -- of the CFOs also said their companies have business operations outside the U.S. "Outsourcing is a lot more prevalent than a lot of people imagine," said Lee Duran, partner in BDO Seidman's technology practice, in an interview with InformationWeek. "Nearly half of companies are doing this, that's a lot of focus on offshore outsourcing."

Silicon Valley tech firms are even more likely to offshore than the average U.S. technology company; 64% of tech companies in Silicon Valley said they source services or production of products outside the U.S. Of U.S. technology companies that outsource business functions offshore, 74% are offshoring manufacturing; 51% are offshoring programming and IT services, including internal services and those offered to external customers; 49% are offshoring research and development; 45% are offshoring distribution; and 35% have outsourced call centers outside the U.S.

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