By Nick Heath, 11 January 2008 16:54
NEWS
India is now outstripping competitors worldwide for cost and service quality and is riding the crest of a revolution in global outsourcing, according to a report.
The report by advisory firm EquaTerra, entitled the Outsourcing Service Provider Performance Study, surveys senior company figures involved in outsourcing.
It found most UK businesses that offshore IT are now choosing at least one provider in India.
Indian outsourcing companies were ranked in four out of the top five positions for client satisfaction in the survey of 320 of the UK's top IT spenders.
The number of UK organisations nearshoring or offshoring leapt from 47 per cent to 57 per cent last year - with all of them offshoring some or all of that work to India. More than half (54 per cent) of businesses surveyed said they are planning to up their outsourcing this year.
Special Report: Inside India
In February last year silicon.com's Steve Ranger visited the Indian tech hotspots of Bangalore, Mumbai, Pune and Hyderabad. Click on the links below to see photo galleries of the cities and companies visited.
♦ Satyam's IT campus
♦ Hyderabad's tech parks
♦ Bringing tech to rural India
♦ High-tech on the streets of Pune
♦ Pune - the new Bangalore?
♦ Boom town Bangalore
♦ Bangalore's Electronics City
♦ SAP and Wipro in Bangalore
Phil Morris, MD of EquaTerra for Europe, predicted growth in UK outsourcing of IT and business processes would continue for at least a decade as increasing numbers of companies are won over by low costs and high quality of service.
But offshoring IT is not costing British workers he said, as the UK does not have enough trained workers to fulfil demand.
He told silicon.com: "India offers all of the economic advantages that companies are looking for, the legacy of an education system and somewhere where there is relatively good English.
"I think the market has got major growth potential for the next 10 years, this is an area where people keep finding different areas where it can offer advice, help and support from different locations and different business structures. We are seeing a kind of Industrial Revolution sweep through the services landscape in the same way it did with manufacturing."
He added: "This is all being driven by technology, the speed of processors and telecommunications together with cleverer application interfaces and graphical user interfaces."
He said global suppliers such as Accenture, HP and IBM would have to play catch-up to match the skills, flexibility and quality of work of Indian firms such as Infosys, TCS and Wipro.
China is only being used as an outsourcing destination by five per cent of UK companies but Morris forecast the rise of outsourcing providers in other countries in Asia, South America and Africa.
Cost remains the primary motivation for IT outsourcing but 54 per cent of companies are now turning to it for skills, flexibility and quality of work.
Comments
There is 1 comment. Join the discussion
1. Karen Challinor
"But offshoring IT is not costing British workers he said, as the UK does not have enough trained workers to fulfil demand"
really?
try looking at the skills of people over 40 then or offering training to the staff you have
but there again, employing uk workers is more expensive than offshoring isn't it and the shareholders need their dividends so the salary bill gets decimated and the skilled staff (i.e. the older and more expensive ones) end up stacking shelves at t*sco or working security desks
now this isn't India's fault nor is it the fault of any offshoring destination, these guys saw they would have an economic advantage, and went for it with both hands and they are providing a high quality service at low cost and more power to their collective elbows for that
however if the playing field were level then I suspect India whouldn't be a market leader, I suspect the british economy wouldn't be heamorraging money in the direction of offshore services and I suspect there wouldn't be any bleating about non existent skills shortages
to paraphrase Jim Royle "offshoring IT not costing british workers? my arse!"