Buyers of outsourcing services in growing numbers are dissatisfied with offshore service providers, prematurely terminating contracts and struggling to harvest the full value of their outsourcing relationships -- even as many of those same companies plan to increase their level of outsourcing over the next 12 months, according to new research by DiamondCluster International (Nasdaq: DTPI), the global management consulting firm.

According to DiamondCluster International's 2005 Global IT Outsourcing Study the number of buyers prematurely terminating an outsourcing relationship has doubled to 51 percent while the number of buyers satisfied with their offshoring providers has plummeted from 79 percent to 62 percent.

DiamondCluster's "2005 Global IT Outsourcing Report" details the findings of surveys and in-depth discussions with 210 senior IT executives at global 1000 companies and with 242 senior executives at outsourcing service providers in the United States, India and other countries. Research was conducted in late 2004 and early 2005. Copies of the complete study are available on request by sending e-mail to: [email protected].

China Rapidly Emerging as Next Offshoring Hot Spot

In 2004, only six percent of survey respondents said they planned to establish offshore operations in China. Today, that number has soared to 40 percent. The most aggressive providers are establishing operations in China now to grab market share. Taking a wait-and-see approach is not an option. Countries that appear to have fallen out of favor, according to the data, are Israel and Russia.

DiamondCluster International (Nasdaq: DTPI) is a premier global management consulting firm that helps leading organizations develop and implement growth strategies, improve operations, and capitalize on technology. Mobilizing multidisciplinary teams from our highly skilled strategy, technology, and operations professionals worldwide, DiamondCluster works collaboratively with clients, unleashing the power within their own organizations to achieve sustainable business advantage. DiamondCluster is headquartered in Chicago, with offices across Europe, North America, the Middle East and South America. To learn more, visit www.diamondcluster.com.