Offshore IT services prove popular
A survey by IT research firm IDC has found that the adoption rate for offshore outsourcing services has nearly doubled since 2005...
The survey was conducted across 200 organisations with greater than 500 employees.
"With the trend toward modernisation and transformation of the IT environment, offshore providers are well positioned to meet the needs of onshore customers,” said Aprajita Sharma, IDC’s program manager IT services.
“Apart from the usual drivers mentioned, many organisations have also stressed increasing shareholder value through operational flexibility, cost reduction and improved efficiencies. These drivers coupled with the economic downturn are expected to fuel demand for offshore outsourcing.”
The survey also found that:
- India remains the destination of choice followed by Philippines . The two major factors that dictated country preference were high quality of English competency and "high quality of technical talent;
- As far as top of mind awareness of offshore services providers is concerned, IBM ranked number 1, followed by TCS and Infosys.
“As the legitimacy of offshore vendors as IT service providers has gained ground, Indian offshore providers have moved up the value chain from providing lower-level tactical services, such as application maintenance, to more strategic transformative outsourcing/managed services engagements,” Sharma said.
“This does pose a potential threat to the Tier 1 players like IBM, HP-EDS and CSC within their large existing client bases. These Tier 1 outsourcing giants have the highest contribution to the ACV (annualised contract value) and consequently they face the highest restructuring risk for both applications services as well as infrastructure management.”
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