software outsourcing

A blog related to software development company and offshore software outsourcing

Monday, August 29, 2005

Software outsourcing benefits will reduce

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 US and in India. Because, in US, salary increase are minimal against very high salary increase in India. Currently whatever software outsourcing work is coming to India, it belongs to low paying IT jobs in 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 percentage per year in US. These jobs involve very high knowledge of 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 high demand of 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 US will be minimal against higher rates of offshore software outsourcing developers who will be in high demand. So even if salary difference and cost saving will be there, risk of offshore outsourcing and advantage of in-house development will persuade many companies to take benefit of US workers.