The Benefits of Offshore Outsourcing
The matter of offshore outsourcing will remain quite acute for IT industry while companies keep transferring their activity offshore. We understand and sympathize the people whose jobs were outsourced and customers still waiting for their technical-support questions answered. But the clamor may be exaggerated. According to one of the latest researches the trend of outsourcing really creates more new jobs. Such tendency is stated in recent study by Global Insight, sponsored by the Information Technology Association of America (ITAA).
With regard to global economy, IT industry globalization is impending. The bulk of large IT companies transfer their activities offshore and kindly wish to have an inside-man in those markets. Still, low standards of living and thus lower wages irresistibly appeal to transfer operations offshore or nearshore, in particular since communication became not a problem due to high-speed communication channels.
Some of criticism towards offshore outsourcing is inappropriate. According to the research held by GlobalInsight, since 1998 through 2003 offshore IT software and services expenses raised from $2.5 billion to $10 billion; this value is anticipated to reach $31 billion by 2008. According to the same study as of 2003 nearly 104,000 IT software and services jobs were outsourced offshore. At the same time 372,000 IT jobs were withdrawn in this country since 2000. The factors which influenced such loss are as follows: the fall of dot-com, economics recession, and growth of efficiency.
Interesting fact, Global Insight states that instead of reducing jobs in U.S., offshore outsourcing lowers costs for everyone and thus creates new jobs. It mentions that about 194,000 new jobs—both IT and non-IT—were created in 2003 thanks to offshore IT outsourcing, and by 2008 the number is anticipated to reach 589,000.
Gartner submitted a report according to which fewer than 5 percent of U.S. IT jobs were outsourced offshore. However, analysts expect that by2010 25 percent will be in third world countries. They recommend companies to move on carefully since hasteful decisions may cause irreparable losses.
Indeed, people who lost their jobs don’t care for new jobs created. However, offshore outsourcing is sometimes inevitable since no satisfactory alternative is available.