Offshore "Threat" Greatest for IT Developers
UK IT professionals working in hardware maintenance roles including upgrade projects and application development are the likeliest to lose their job offshore.
May 15, 2006
Over two thirds of IT directors cite equipment maintenance and upgrade projects at the top of their outsourcing hit lists, according to HCL Technologies, the IT services outfit.
Software Development is the next most anticipated export – surprisingly showing that the activity is more likely to be offshored than Help Desk and Technical Support.
Just one third of IT decision–makers expect such lower level technical jobs to be offshored - an admission that "contradicts many previously held beliefs" about helpdesk jobs’ longevity, HCL said.
In contrast, the consensus among 1,000 IT directors is that offshore suppliers are improving their image as competent managers of infrastructure.
HCL said the nascent market, which includes remote infrastructure management, will continue to grow at a "healthy rate," given 39 per cent of directors rated it is their ultimate offshore choice.
"It is no surprise that application development still rates highly in the outsourcing stakes, but many businesses are now seeing real benefits from developing a co-sourcing relationship with suppliers who are able to handle infrastructure issues as well," said Vineet Nayar, chief executive.
"There is a real, additional benefit available to organisations that link their application development/ management work with process outsourcing and infrastructure management."
He added that the savings from the links between these activities "can significantly improve a company’s competitive advantage."
The message from the BPO giant is being embraced by European, and in particular, UK companies, according to industry captains at Gartner’s European Outsourcing and IT Services Summit.
EU-based organisations will fuel the growth in offshore outsourcing with a 50 per cent ‘year on year’ spending rise predicted in 2006 and 2007, compared to just 30 per cent in the US, the analyst said.
Ian Marriott, its VP for research, explained, "The market for offshore outsourcing is on the increase, with the number of companies using high levels of offshore activity globally set to increase from 13 to 20 per cent in the next two years."
For European companies, India retains its market lead, but faces a number of pressures such as wage inflation and overstretched infrastructure, thanks to the sheer weight of demand from Western clients.
As a result, European companies are following the advice from outsourcing analysts to consider more ‘nearshore’ locations, regardless of whether their labour force is English-speaking.
In order of the most popular, the new emerging offshore hotspots are Czech Republic, Hungary; Ireland, Latvia, Northern Ireland, Poland, Romania, Russia and Slovakia.
Elsewhere, the analyst said its research shows companies are unlikely to find every IT capability in every country at one time to satisfy their offshore requirements.
However, ‘the more developed the location the more scalable the offering is likely to be,’ Gartner said.
"Offshoring needs to be part of a wider sourcing strategy that takes a longer-term view of where capabilities are best deployed, regardless of their location," Mr Marriott added.
"In addition, buyers have to be realistic about their willingness and capability to address the increased risks and challenges of having work delivered from offshore locations."
Software Development is the next most anticipated export – surprisingly showing that the activity is more likely to be offshored than Help Desk and Technical Support.
Just one third of IT decision–makers expect such lower level technical jobs to be offshored - an admission that "contradicts many previously held beliefs" about helpdesk jobs’ longevity, HCL said.
In contrast, the consensus among 1,000 IT directors is that offshore suppliers are improving their image as competent managers of infrastructure.
HCL said the nascent market, which includes remote infrastructure management, will continue to grow at a "healthy rate," given 39 per cent of directors rated it is their ultimate offshore choice.
"It is no surprise that application development still rates highly in the outsourcing stakes, but many businesses are now seeing real benefits from developing a co-sourcing relationship with suppliers who are able to handle infrastructure issues as well," said Vineet Nayar, chief executive.
"There is a real, additional benefit available to organisations that link their application development/ management work with process outsourcing and infrastructure management."
He added that the savings from the links between these activities "can significantly improve a company’s competitive advantage."
The message from the BPO giant is being embraced by European, and in particular, UK companies, according to industry captains at Gartner’s European Outsourcing and IT Services Summit.
EU-based organisations will fuel the growth in offshore outsourcing with a 50 per cent ‘year on year’ spending rise predicted in 2006 and 2007, compared to just 30 per cent in the US, the analyst said.
Ian Marriott, its VP for research, explained, "The market for offshore outsourcing is on the increase, with the number of companies using high levels of offshore activity globally set to increase from 13 to 20 per cent in the next two years."
For European companies, India retains its market lead, but faces a number of pressures such as wage inflation and overstretched infrastructure, thanks to the sheer weight of demand from Western clients.
As a result, European companies are following the advice from outsourcing analysts to consider more ‘nearshore’ locations, regardless of whether their labour force is English-speaking.
In order of the most popular, the new emerging offshore hotspots are Czech Republic, Hungary; Ireland, Latvia, Northern Ireland, Poland, Romania, Russia and Slovakia.
Elsewhere, the analyst said its research shows companies are unlikely to find every IT capability in every country at one time to satisfy their offshore requirements.
However, ‘the more developed the location the more scalable the offering is likely to be,’ Gartner said.
"Offshoring needs to be part of a wider sourcing strategy that takes a longer-term view of where capabilities are best deployed, regardless of their location," Mr Marriott added.
"In addition, buyers have to be realistic about their willingness and capability to address the increased risks and challenges of having work delivered from offshore locations."