Given the uncertainty about the US economic situation continues, a recent survey has forecast that spending on IT by the world’s biggest economy will shrink in the April-June quarter for the first time in nearly seven years (according to http://www.offshoringtimes.com). So US companies are looking for cost reduction, thus choosing cheap labour outsourcing destinations.
As outsourcing to India becomes more expensive, North American companies are seeking alternatives. In years past a company could save 40% to 50% by hiring Indian firms to handle IT and other services, says Atul Vashistha, chairman at neoIT management consulting firm. Should the U.S. dollar continue its descent, that differential would shrink to 10% to 20%, he estimates. "If you're only going to have a 20% savings, clients start to think about time zone," Vashistha says.
Though costs are increasing in India, anyway the country is generally less expensive than Latin America and most other locations, especially for companies that don't require high-end software development services. It’s envisioned that Mexico and the rest of Latin America will only act as a complement to India and other offshore locations. So, Europe can benefit from US recession and who knows, may be, it’s on the threshold of an IT outsourcing boom?
Source: BusinessWeek
As outsourcing to India becomes more expensive, North American companies are seeking alternatives. In years past a company could save 40% to 50% by hiring Indian firms to handle IT and other services, says Atul Vashistha, chairman at neoIT management consulting firm. Should the U.S. dollar continue its descent, that differential would shrink to 10% to 20%, he estimates. "If you're only going to have a 20% savings, clients start to think about time zone," Vashistha says.
Though costs are increasing in India, anyway the country is generally less expensive than Latin America and most other locations, especially for companies that don't require high-end software development services. It’s envisioned that Mexico and the rest of Latin America will only act as a complement to India and other offshore locations. So, Europe can benefit from US recession and who knows, may be, it’s on the threshold of an IT outsourcing boom?
Source: BusinessWeek
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