CIO Forum: SMEs to ride next offshoring wave

Small businesses will be the next to benefit from offshore outsourcing - but it might not be a route taken by every company.

Benjamin Schmittzehe, chief executive of management consultancy Schmittzehe & Partners said there is a "huge untapped market" in the form of the smaller businesses that have not yet embraced outsourcing.

Speaking at the silicon.com CIO Forum in London, he said: "One of the reasons it hasn't happened so far is, primarily, if you are trying to develop offshoring capabilities it's more efficient to target the large companies - that's where the cream is."

He said there is a "massive opportunity" for SMEs in terms of cost savings and added: "One of the big differences between multinationals and SMEs is that SMEs are more stretched."

But Ehab Roufail, programme manager at 192.com, warned there are potential pitfalls for the unwary. "I'm from an SME background and for most SMEs it doesn't make sense to outsource to India," he told the audience of IT executives at the conference.

Roufail added: "You have to spec things out and put a lot of processes in place to make sure that [outsourcers] don't go off at a tangent." He said outsourcing might be an appropriate option when smaller companies have grown larger but said that to do so at the beginning could be a "big danger".

Speaking on the same panel Manpower CTO Kevin Fitzpatrick said there can be big benefits from using offshoring, and that skills - particularly to support commodity services or infrastructure technology - are widely available.

He said: "The business case for offshoring work is definitely there - the role of the CIO is making sure that the process will work, that we've covered all the bases."