US slowdown boosts outsourcing
A slowing US economy will encourage firms to send IT outsourcing to low-cost locations for savings and productivity, according to research firm Gartner.
Gartner believes that buyers of IT services will cease to focus their attention on cost containment by aiming for greater cost reduction and productivity increases in their sourcing decisions. “Organisations are likely to conclude that increasing the proportion of work to offshore locations is the best way to reduce labour costs, among other benefits,” said Arup Roy, a senior Gartner research analyst. “In most sectors, the watchword is ‘caution’ – IT budgets have not yet been cut, and offshore services options are being considered or accelerated as a prudent step to contain labour costs.”
India is like to be the primary beneficiary of this. “Factors that will give India the edge over other offshore locations are scale and quality of labour,” said Gartner research director T J Singh.”North American and European buyers of IT services have been the force behind a growing offshore services market and India is central to almost any discussion of offshore services delivery for these buyers.”