software outsourcing

A blog related to software development company and offshore software outsourcing

Saturday, May 07, 2005

Offshore software outsourcing improves production by 25%

Jobs in United states, in manufacturing and other sectors, will continue to be moved to India and other countries as foreign workers work more at low cost than their american counterparts, which increases production of the business processes outsourced by up to 25 per cent, a new research has said.

The trend of sending higher-paying jobs offshore would continue and a key reason is lack of appropriate skills in the United States, according to a survey by the Earth Institute at Columbia University.

Of the 45 companies surveyed, a majority said after they shipped work abroad the quality of the product improved. They also said foreign workers have better skills than Americans and put more efforts.

The companies represented a broad cross-section of industry, from automotive and banking to government, healthcare, financial and computer services.

The institute said 82 per cent of the companies currently outsource jobs, and 70 per cent said production of the business processes they outsourced abroad was up 5 to 25 per cent. Sixty-two per cent were looking to outsource business processes and software outsourcing to countries other than India, the report said.

"Companies, including offshore pioneers such as General Electric, Nortel Networks and Citibank, found that actual cost savings, which remain the primary reason for outsourcing, were achieved by 67 per cent of the companies to the tune of 5 to 50 per cent," said the report.

"The main downside to outsourcing perceived by American businesses is loss of institutional knowledge, data security, loss of intellectual property rights, and political risks," the report added.