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Rita Terdiman, Gartner Analyst |
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Going Offshore to Globally Source IT Services: What Does the Future Hold?
Wednesday, 26 March 2003
India and other nations have demonstrated the potential of offshore outsourcing.
Gartner analyst Rita Terdiman told Symposium/ITxpo 2003 attendees on Tuesday that " global delivery has become the new paradigm for the outsourcing of IT services."
In her presentation, "Going Offshore to Globally Source IT Services: What Does the Future Hold?" Ms. Terdiman said that by 2004, offshore sourcing must become one of the top strategic sourcing options for all U.S. enterprises.
"U.S., enterprises that do not seriously consider global sourcing for IT services within the next two years will be doing their shareholders a disservice," she said.
A Changing Marketplace
An increasingly competitive global market shaped by emerging technologies and the rise of new entrants into the field pose new issues for both U.S. corporations and offshore external services providers (ESPs) working with the international market. Ms. Terdiman forecasted that the outsourcing market and made the following recommendations for IT organizations seeking to take advantage of the advantages offered by offshore ESPs.
Be proactive with the many new types of service delivery that are being offered. Offshore is changing and maturing
As offshore outsourcing becomes a staple of senior executives, IT organizations must be prepared to source services and resources on a global level
Enterprises should include global delivery as a part of their overall sourcing strategy
Ms. Terdiman identified some broad trends that are shaping the market, including increasing interest in global source and growing complexity in offshore IT services, concluding that IT servcies vendors should primarily focus on large enterprises during the next 12 to 18 months.
India Faces Rising Competitors
India, coming off of two remarkable years of IT development, will remain the leader in the outsourcing market in coming years, she said.
But Ms. Terdiman pointed out that geopolitical uncertainty, stemming, in part, from tensions with Pakistan, and the emergence of new competitors — particularly China — raise uncertainty about the long-term market.
China ("the country to watch") and other challengers, including Canada, the Philippines, Ireland and Mexico, are likely to become offshore contenders, carving out niche markets for selected services, she said.
Ms. Terdiman urged careful consideration in considering offshore service providers. In addition to the service offerings of an individual ESP, a wide range of factors, including cultural compatibility, government support and the available labor pool can determine the suitability of a country of origin for offshore projects.
Mike Hill
Gartner Staff
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