Global outsourcing

Tuesday, May 31, 2005

Global Software outsourcing – Around 25% of high technology jobs today in developed countries will go to emerging markets like Russia by 2010. This was reported by Gartner Inc., the world leader in research. Gartner presented its analysis and trend in outsourcing at Symposium ITxpo in Barcelona, Spain.

According to Roger Cox, Managing Vice President, Gartner “Last year saw a phenomenon in Europe, Out of 15 one billion US dollar mega-deals signed in 2003, 10 were awarded by Europe-based enterprises. Until 2003, Europe-based organizations had only signed a total of 14 mega-deals since 1989.” Vicepresident Ian Marriott mentioned that global outsourcing is becoming mainstream delivery model.

Potential cost advantages of outsourcing are such a high that, companies that are not considering outsourcing seriously are harming their shareholders. On the other hand, businesses also lose their competitive advantage and the inability to focus on growth.

It was also mentioned that India is the preferred destination for outsourcing, although china and Russia are picking up as strong contenders. Many other countries are also eyeing the potential offshore software outsourcing business. Though the outsourcing boom was late in Europe compare to the US, it is catching up well with the year 2003 as a turning point.

Mr. Marriot also mentioned, “There is no doubt that the predicted shift in jobs associated with global sourcing is a harsh reality. However, there is nothing new about technology causing massive shifts in how and where people work. This is an unavoidable outcome of how the global marketplace operates today and western economies have been successful in navigating successive waves of economic transformation in the past.”

Gartner also mentioned the need for investment in new skills for organizations to make outsourcing work and that will create additional jobs.