Offshore outsourcing gains momentum

Analyst group, IDC is predicting that offshore component of the US IT services market could jump to 23% by 2007, up dramatically from 5% in 2003.

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By  Greg Wilson Published  November 24, 2003

Offshore outsourcing is gaining momentum in the US IT services market. Analyst group, IDC is predicting that offshore component of the US IT services market could jump to 23% by 2007, up dramatically from 5% in 2003.

Despite gloomy articles in the press, the shift may not necessarily translate into wholesale job losses in the US services industry.

According to IDC, US services firms will continue to use offshore resources to lower costs, while the majority of US workers at risk will leverage their current expertise into new skills that will remain in demand.

“Several facts have been lost in the debate about offshore sourcing,” comments Ned May, program manager of IDC’s Worldwide Services research.

“One is that much of the spending to date has focused on only a few activities, which limits the impact of offshore on the broader market. Another is that much of the offshore spending will be captured by locally-based vendors, [which] are currently building up their own offshore delivery resources. But the most important fact being overlooked is that while there will be a migration of some jobs overseas, it will be coupled with steady growth in a number of service activities on US soil,” he adds.

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