Offshore Outsourcing in VogueMonday, February 13, 2006
Analysts and Offshore Outsourcing experts identified five major styles in offshore IT and Software development. Here is a summary of the trends, as well as some of the factors driving them individually in Outsourcing industry:
IT jobs will move overseas in the coming years: The Forrester Research estimating that the demand for Offshore Outsourcing will account for more than 28% of Information Technology budgets in European and American countries within next two years. Further, the number of Offshore IT employees globally for software development work by overseas projects for western organizations will go from 360,000 today to 1.10 million by 2006. Customers are now banging on the doors demanding data on where they should go for Offshore Outsourcing for IT and Software Development.
There are more and more corporate giants who openly dedicate Offshore Outsourcing Development centers in countries like India and Russia; while most of the smaller firms tend to make the offshore test with a small project or two. The big names or giants tend to cement these relationships by setting up huge dedicated development centers in their choice of countries. For example, Microsoft and GE, built campuses in India several years back. Over the past couple of years, Intel, Boeing and Motorola have preferred Russia as the best place for dedicated Offshore Outsourcing centers.
Dell views the center as a way to focus internal Offshore Outsourcing resources on specific core areas while scaling up the pace of Information Technology deliverables, and at the same time with reduced cost.
Some organizations are understandably hesitant to make Software Development in some countries where software piracy is rife and where western intellectual property legislation is in its infancy, because of gradual acceptance of IP standards. But with leading international organizations heavily involved in countries like India and Russia, the legislative picture is totally changing. Intel’s employees believe that while it is essential to take effective IP protection actions in these nations, he has found governments receptive to changes will encourage greater business cooperation.
Offshore Outsourcing moves up the value chain, offshore Software Development dealt with mainframe maintenance originally, and the offshore industry inherited labor intensive body shop type Information Technology tasks such as printer drivers and Y2K.The Offshore Outsourcing resources in places like India are accomplished in high end and complex algorithm intensive Software projects.
Stratification of Offshore Outsourcing countries based on cost and skill sets likes of India and Ireland were once the rising stars, both offered very low rates and an available resource pool. But recently, though, these advantages have diminished, largely as a result of their rise in popularity. Ireland can not compete longer on price with most countries likes of India and China. To survive, these nations must move up the value chain while others take their place as the place to go to find an abundance of highly skilled IT-programmers at low rates. India and China is the two he taps to replace Ireland and Russia as the darlings of the Offshore Outsourcing world.