The latest surveys conducted by the market research leading company Gartner
Dataquest show that the demand for offshore sourcing is still immature and
penetration of the U.S. market is low, however, the industry will continue
to experience steady growth. It proves once more that emergent markets not
only offer a good distribution site, but also represent an increasingly
reliable and rich source of professionals and ideas.
Gartner Dataquest conducted phone interviews, in January and February
2002, with 917 U.S.-based companies (with 1,000 employees or more) to
gauge their interest in offshore IT services. Five percent (42 companies)
indicated they currently use or plan to use offshore resources in the
next 12 months. Among respondents who expect to increase their budgets
for offshore initiatives in 2003, 69 percent expect budgets to be 1.5
times that of 2002. Twenty-six percent expect to nearly double their spending
for offshore IT services within the next year.
According to the survey, the top opportunities for growth in offshore
services over the next year will include enterprise application integration
(EAI) services, applications outsourcing, packaged application implementation
and integration with legacy applications beyond applications development
and maintenance services.
Currently, India is the primary country of choice for IT service spending
with 70 percent of survey respondents acquiring offshore services from
India. Eighty-three percent say they plan to outsource to India within
the next year. Canada, Ireland, Singapore, Mexico and China were also
sited as countries to outsource to.
Even with the current political situation, Gartner Dataquest predicts
India will maintain its leadership position and possibly expand its penetration
over the next 12 months.
"The India/Pakistan crisis has increased the level of focus on the
need to manage Geo-political risk, but has not substantially changed plans
for offshore services or the choice of country," said Debashish Sinha,
principal analyst for Gartner Dataquest's IT services group. "We
advise clients to work with their offshore vendors to focus, update and
improve their current business continuity plans in the wake of current
Further discussion of offshore outsourcing and related services issues
will be discussed at Gartner Symposium/ITxpo, October 6-11 in Orlando,