Quarter of IT jobs will move offshore by 2010
Mar 15, 2004
A quarter of traditional IT jobs in Western countries will move to offshore locations such as India by 2010 as the global outsourcing trend continues to boom, according to the latest figures from Gartner.
The research shows that outsourcing as a whole is outstripping the IT services market in Europe, growing by 3.1 per cent in 2004 and predicted to rise to 8 per cent by 2007, with the offshore element tipped to grow hugely. Gartner predicts almost a third of leading European businesses will include an offshore element in their IT plans by 2005.
As a result of this shift of IT services overseas, jobs will inevitably follow and up to 25 per cent of Western IT jobs could go to the emerging markets by 2010. But Roger Cox, managing VP at Gartner, said the alarming nature of that headline figure masks the true story.
"That 25 per cent is over a long period of time," he said. "And if we turn back to a period of growth then you'll find those jobs could go entirely into growth," he told silicon.com.
On another negative note, Gartner claims that 2004 will see the first major offshoring failure that will lead to a company taking its operations back onshore. Cox said this won't necessarily reflect the bigger picture and has more to do with the politics of offshoring, which will see the backlash against white collar job loss continue during the year.
"Because it is being hyped up, it has become very political, so any failure will be more visible," he said.
Cox said offshoring has already proved itself as a mainstream IT business decision but warned against companies looking to use the model to make quick cost savings.
"The first thing is to get that business alignment right," he said. "If companies are only looking at price and levels of service, they are going to drive it off the rails."
In terms of favoured offshore locations, India still dominates, with China and Russia trying to break through as genuine alternatives for European companies. Gartner also predicts that the new countries joining the European Union in May will become popular for 'nearshore' outsourcing of some operations, although not on the sort of scale that will pose a threat to India.
The research shows that outsourcing as a whole is outstripping the IT services market in Europe, growing by 3.1 per cent in 2004 and predicted to rise to 8 per cent by 2007, with the offshore element tipped to grow hugely. Gartner predicts almost a third of leading European businesses will include an offshore element in their IT plans by 2005.
As a result of this shift of IT services overseas, jobs will inevitably follow and up to 25 per cent of Western IT jobs could go to the emerging markets by 2010. But Roger Cox, managing VP at Gartner, said the alarming nature of that headline figure masks the true story.
"That 25 per cent is over a long period of time," he said. "And if we turn back to a period of growth then you'll find those jobs could go entirely into growth," he told silicon.com.
On another negative note, Gartner claims that 2004 will see the first major offshoring failure that will lead to a company taking its operations back onshore. Cox said this won't necessarily reflect the bigger picture and has more to do with the politics of offshoring, which will see the backlash against white collar job loss continue during the year.
"Because it is being hyped up, it has become very political, so any failure will be more visible," he said.
Cox said offshoring has already proved itself as a mainstream IT business decision but warned against companies looking to use the model to make quick cost savings.
"The first thing is to get that business alignment right," he said. "If companies are only looking at price and levels of service, they are going to drive it off the rails."
In terms of favoured offshore locations, India still dominates, with China and Russia trying to break through as genuine alternatives for European companies. Gartner also predicts that the new countries joining the European Union in May will become popular for 'nearshore' outsourcing of some operations, although not on the sort of scale that will pose a threat to India.