Offshore Outsourcing

In US many research are mentioning that, by the year 2015, 3.3 million jobs in business process will move abroad. And those research also mentions that, jobs going offshore will accelerate at the rate of 30 - 40% every year. But these researches are without proper basis. As most of the jobs require consumer and service provider to be at the same place. Those jobs which move offshore should be considered as a part of economic restructuring. In long term jobs which are moved offshore for offshore outsourcing, generally will save millions of dollars which improves economy.

Offshore Outosurcing

So controversy around offshore outsourcing as the reason for job loss in US is more a political issue rather then reality. India has around two hundreds and fifty thousand employees working in business process outsourcing. This number is not such a big that, it can become a threat to 100 million workers in US service sector. And American companies are very much eager to tap the cheaper labor source to do offshore outsourcing and compete globally.

Software Outsourcing

In 2004, 75% of the US companies did software outsourcing of all or some part of their information technology work. And with software outsourcing booming, in the year 2005, that will increase. This was mentioned in a report on outsourcing and offshoring by Horasis and Going Global Ventures. Out of those 75% companies only 32% companies have done software outsourcing to offshore and half of them have cut their full time jobs.

Software outsourcing to India

For software outsourcing, India is the most popular destination. And it will remain leader in the year 2005 too. But according to the report China will be the leader in next ten years. This report also rank countries base on their risk, costs and opportunities for software outsourcing for now and also for the future. This report was compiled by Frank Jrgen Richter, president of horasis and Mark Minevich who is international strategic advisor and principal at Going Global Ventures. Going global is US based consulting and venture advisory firm while, Global visions community is a geneva based strategic advisory firm. Software outsourcing is a very hot issue because of fears of job loss. Because of that there is high oppose to it politically as well as by some organizations. But costs saving is such a huge that, corporates are going to work on this strategy. But corporates need to look at benefits, cultural difference, costs saving, risks etc. for each country.

Report mentions that, currently India, china, costarica, Czech Republic and Hungary are the top 5 destinations for software outsourcing. But in 2015, China, India, US, Brazil and Russia will be the top 5 countries for software outsourcing. Report was prepared using two different indexes - glbal outsourcing inded - GOI and future outsourcing rank FOR. The GOI index is made up of cost of doing business in each country, risks associated with it and market opportunities. While future outsourcing index was made up of assesses the long term competitiveness of the top 30 future outsourcing countries.

Software Outsourcing

There is a huge political oppose in US about software outsourcing. Yet software outsourcing will continue and according to Gartner research firm, out of every four high technology jobs in developed countries like US, one will be outsourced to developing country like India by 2010. Although, china and Russia are emerging, India is yet undisputed leader in software outsourcing. Gartner also mentioned that, growth in offshore outsourcing to India is the biggest shift in Information technology field in the near term. Now a days, offshore outsourcing has became a part in strategy of business not just cost cutting mean. Global sourcing is becoming mainstream delivery model for businesses. Companies which are not considering software outsourcing are risking their share holder's advantage. Because cost saving is very high in offshore outsourcing.

Offshore outsourcing

Software Outsourcing is booming in US and now it is catching up in Europe also. In 2005 first quarter, Europe was ahead of US in software outsourcing due to the major deal of British telecom. With the increase of outsourcing from Europe and specifically from countries like UK and France, it is very clear that, companies are overcoming the cultural resistance.