Software outsourcing benefits will reduce

Monday, August 29, 2005

Software outsourcing is mainly done for the reason of cost-saving provided by offshore outsourcing. But according to some researches, by 2008, cost-saving will be very less for well-paid software engineering jobs in the US and in India. Because, in the US, the salary increase is minimal against a very high salary increase in India. Currently, whatever software outsourcing work is coming to India, it belongs to low paying IT jobs in the US. They are like computer support or computer operators or software coding. On the other hand jobs like system analysis and design, research and development are continuing to see higher growth in the region of 4 to 5 percent per year in the US. These jobs involve very high knowledge of the internal IT system and business process because of which they are difficult to outsource.

Software engineers for systems and applications are also expected to be in high demand and jobs will increase around 6%. Because, in spite of software outsourcing to India, China, or Russia, companies will still require in-house customization of software they have purchased. There is also a high demand for research scientists and managers. So according to the report of Forrester Research, by 2008, offshore outsourcing advantages will decrease. Cost-saving will also decrease as salary rise in the US will be minimal against higher rates of offshore software outsourcing developers who will be in high demand. So even if the salary difference and cost-saving will be there, the risk of offshore outsourcing and the advantage of in-house development will persuade many companies to take benefit of US workers.