News

Gartner: Economic Woes Will Increase Offshoring

Research firm Gartner is predicting that the current economic downturn in the United States will mean that more IT and development positions will go overseas.

In a summary of the report, "Offshoring IT Services Can Cut Costs: Options for a Potential Economic Downturn," Gartner analyst and Vice President Allie Young commented, "In the best case scenario [a short-term downturn], buyers will aggressively seek cost-saving measures by accelerating offshore delivery or, for first time users, moving IT services to offshore locations."

In the case of an extended downturn, Young predicted that "buyers will aggressively move toward offshore destinations and service providers that can offer a global delivery model to access lower-cost IT labor for routine IT work that must continue for the business to operate."

Another Gartner analyst, Arup Roy, agreed, saying that "Organizations are likely to conclude that increasing the proportion of work to offshore locations is the best way to reduce labor costs, among other benefits."

"In most sectors, the watchword is caution," Roy continued. "IT budgets have not yet been cut, and offshore services options are being considered or accelerated as a prudent step to contain labor costs."

The study was released by the India-based arm of Gartner last month. It indicated that India will most likely continue to be a lead choice for outsourced services, despite "the recent appreciation of the Indian rupee and rising wage rates."

The study is available here.

About the Author

Becky Nagel is the vice president of Web & Digital Strategy for 1105's Converge360 Group, where she oversees the front-end Web team and deals with all aspects of digital strategy. She also serves as executive editor of the group's media Web sites, and you'll even find her byline on PureAI.com, the group's newest site for enterprise developers working with AI. She recently gave a talk at a leading technical publishers conference about how changes in Web technology may impact publishers' bottom lines. Follow her on twitter @beckynagel.

Featured

  • Spaceflight Training in the Middle of a Pandemic

    Surprisingly, the worldwide COVID-19 lockdown has hardly slowed down the space training process for Brien. In fact, it has accelerated it.

  • Surface and ARM: Why Microsoft Shouldn't Follow Apple's Lead and Dump Intel

    Microsoft's current Surface flagship, the Surface Pro X, already runs on ARM. But as the ill-fated Surface RT showed, going all-in on ARM never did Microsoft many favors.

  • IT Security Isn't Supposed To Be Easy

    Joey explains why it's worth it to endure a little inconvenience for the long-term benefits of a password manager and multifactor authentication.

  • Microsoft Makes It Easier To Self-Provision PCs via Windows Autopilot When VPNs Are Used

    Microsoft announced this week that the Windows Autopilot service used with Microsoft Intune now supports enrolling devices, even in cases where virtual private networks (VPNs) might get in the way.

comments powered by Disqus

Office 365 Watch

Sign up for our newsletter.

Terms and Privacy Policy consent

I agree to this site's Privacy Policy.