   2006 Study on Outsourcing underscores teething pains
Quote:Amritt Ventures Reports:Game Industry Experiences Teething Pains in Expanding Offshore Outsourcing Respondents show little interest in reversing course, however  FOR IMMEDIATE RELEASE: JULY 25, 2006 Cerritos, Calif. – As the offshore outsourcing wave has swept through the videogame industry in the last year, results are decidedly mixed, according to the Amritt 2006 Outsourcing Trendlines Study released today.“58% of respondents with outsourcing experience admitted that the process of offshore outsourcing was significantly harder than they had anticipated, while only 18% found it much easier than they expected,” said Gunjan Bagla, Principal of the Game Industry Practice at Amritt.  In response to another question, 8% of respondents who have been outsourcing for over a year reported that they dropped their initial vendor completely.  Another 33% added new vendors because their initial choice disappointed them with schedule or quality issues.  “It’s reasonable to add new vendors due to capacity issues as 19% of our respondents did, or to reduce risk, as another 15% of respondents reported.  But disappointments over quality and schedule indicate systemic issues.”As predicted in the 2005 Outsourcing Trendlines Study by Amritt, Art was the most cited function to be outsourced in 2006, with 43% of the respondents already having sent some next-gen art offshore.  Still lagging in volume of offshore outsourcing, if not in current interest, are the functions of Quality Assurance, programming and porting.  Respondents who experienced disappointments and those who switched vendors were also asked if they would bring back all work in-house.  Only 6% of such respondents said they were actively considered terminating all outsourcing contracts. None reported that they had actually terminated their outsourcing initiatives.  “Clearly global outsourcing is established as part of the ecosystem in the games business, despite current teething pains,” declared Bagla.The 2006 study also finds that 44% of respondents saved less than they had expected, while 19% saved about as much as expected.  Six percent reported saving more than they expected, while 20% in this survey reported that cost saving was not their motivation in outsourcing..The Amritt 2006 Outsourcing Trendlines Study is based on responses from 317 game-industry participants in the United States and was conducted between May and July 2006.  Amritt is a professional advisory service that helps companies leverage global resources and global markets.  Practices include Video Games, Visual Effects and Software/IT.  Media contact Gunjan Bagla (310) 614 1326. No advertising or other promotional use can be made of the information in this release without the consent of Amritt Ventures, Inc.Sorry about the formatting; I'm pressed for time. Email me for the original Word document containing the press release.   