Forrester adjusts outsourcing numbers upward
Research firm expects 830,000 jobs to be sent overseas through 2005; number will rise to 3.4 million by 2015.
Computerworld - Forrester Research Inc. says the number of jobs moving offshore is accelerating in the short term, and it now expects that 830,000 jobs will move offshore by the end of 2005. That's a 40% increase from a previous estimate made by the Cambridge, Mass.-based research firm.
But Forrester said its long-term estimate has changed little. It expects that 3.4 million jobs will be moved offshore by 2015; it had previously estimated 3.3 million.
One of the reasons for this short-term surge is the political backlash over offshore work. In a twist of the public relations adage that any publicity is good publicity, the political furor has "increased the awareness of offshore outsourcing, and increased the awareness of the value of offshore outsourcing," said Forrester analyst Stephanie Moore.
Other factors contributing to the short-term acceleration are the expanding range of offshore options to other tasks beyond application development and maintenance, such as infrastructure support, and growing use of business-process outsourcing. Moreover, U.S.-based companies such as IBM and Accenture are rapidly expanding offshore operations.
In addition, IT departments are being asked to do more as the economy recovers, "yet the IT budget is still flat or declining, so companies are looking at offshore as a way of potentially doing more with less or the same amount," said Forrester analyst John McCarthy during a teleconference today.
But the long-term projection is holding steady because the complexity of going offshore "is still going to hold back companies," McCarthy said, as is the "skill restraints" among offshore workers.
Although there are occasional reports of companies pulling back from offshore outsourcing, Forrester analysts said offshore development will continue to see steady growth.
Forrester said its projections were gleaned from a variety of sources, including its own surveys and vendor and customer discussions, as well as third-party numbers.
One obvious sign of the interest in offshore work is in the bottom line of some of the major India-based vendors, where most of the work will continue to go.
For example, Bangalore-based Wipro Ltd. last month said its revenue for the fiscal year that ended March 31 increased 36% from the previous year to $1.35 billion. In its 2000 fiscal year, the company reported $280 million in revenue.
Another Bangalore-based company, Infosys Technologies Ltd., reported a year-to-year revenue gain of 41% to just over $1 billion. In its 1999 fiscal year, the company earned $121 million in revenue.
Read more about IT Outsourcing in Computerworld's IT Outsourcing Topic Center.
- Best iPhone, iPad Business Apps for 2014
- 14 Tech Conventions You Should Attend in 2014
- 10 Desktop Apps to Power Your Windows PC
- How to Add New Job Skills Without Going Back to School
- Slideshow: 7 security mistakes people make with their mobile device
- iOS vs. Android: Which is more secure?
- 11 sure signs you've been hacked
- Review: Box beats Dropbox - and all the rest - for business Box trumps Dropbox, Engyte, Citrix ShareFile, EMC Syncplicity, and OwnCloud with rich mix of file sync, file sharing, user management, deep reporting and...
- Analyst Report-Mixed All Flash Arrays Delivers Safer Higher Performance What is the impact of an all-flash array with enterprise features and reliability on the mainstream data center? In the mainstream environment, storage...
- Embracing Flash Storage Exec Brief Flash storage can deliver impressive performance, especially for random I/O, by eliminating rotational and seek latencies that are common in all hard disk...
- Embracing Tiered Storage Exec Brief All data is not created equal and thus all data need not be treated the same by the storage system. IT executives must...
- Live Webcast Best Practices for the Hyperconverged Enterprise Network To the Age of Constant Connectivity and Information overload
- Live Webcast On-demand webinar: "Mobility Mayhem: Balancing BYOD with Enterprise Security" Check out this on-demand webinar to hear Sophos senior security expert John Shier deep dive into how BYOD impacts your enterprise security strategy...
- Live Webcast Endpoint Backup & Restore: Protect Everyone, Everywhere Arek Sokol from the bleeding-edge IT team at Genentech/Roche explains how he leverages cross-platform enterprise endpoint backup in the public cloud as part...
On-Demand Webcast: 7 Reasons to Choose VoIP
Thinking about a new phone system for your business?
Be sure to watch this informative webcast. Steve Strauss, small business columnist for USA...