Outsourcing: Come Sail Away With IT
Monday, May 17, 2004; 9:54 AM
While Forrester charges for the full report, the company already spilled the beans on its most important findings: In addition to its prediction that more than 3 million jobs will sail away, "The number of US services jobs moving offshore by the end of 2005 will grow to 830,000 compared with its original projection of 588,000 -- an increase of 40 percent." Forrester said a change in base-level numbers from the U.S. Bureau of Labor Statistics is part of the reason for the climb, but also noted that Fortune 1,000 firms that are already offshoring will increase their reliance on the trend.
And more reasons why outsourcing isn't going away, according to Forrester. "Customer and competitive pressure have caused services and technology vendors like IBM and Accenture to expand operations in India, China, and the Philippines. These two companies alone plan to add close to 9,000 jobs in India by the end of 2005," the study found. The study also noted that India will have new outsourcing competitors, including Vietnam and North Africa (Forrester lists China too, though it seems China is already well entrenched on the outsourcing bandwagon). Forrester has planned a morning press conference on its outsourcing findings.
The News.com article also explained how Forrester is downplaying the severity of the report's findings: "[Forrester] noted that it represents less than 7 percent of jobs in the categories covered by the study, which include 'management,' 'computer' and 'legal.' What's more, a separate Forrester survey of 139 North American firms in April found that 58 percent are not using--or planning to use--offshore information technology service providers"
CNET's News.com: Study Supports Controversial Offshore Numbers
Forrester rival Gartner has some of its own outsourcing-related findings. "Calling for caution in outsourcing to low-cost countries, IT analyst firm Gartner has said companies must identify and manage the security risks before signing any offshoring agreement. The key to successful and secure outsourcing agreements is understanding the security and privacy risks for a business process, application or technology function early in the outsourcing decision process, said senior analysts at Gartner Inc.," press service United News of India reported. Gartner plans a global IT security summit next month in Washington.
UNI via deepikagloba.com: Gartner Warns of Security Risks In Outsourcing
That's Memphis, Tennessee, Not Egypt
Tennessee is the latest entrant into the anti-offshoring fray. "Gov. Phil Bredesen has signed a law that may have made Tennessee the first state to give businesses an incentive for not outsourcing data-entry and call-center work to cheaper offshore locales. The new law asks state procurement officials to give preference in bids for such services to contractors employing workers only in the United States. It was approved overwhelmingly by lawmakers last month and signed into law last week," The Associated Press reported. "The bill was introduced in response to the growing controversy over outsourcing of white-collar jobs to India and other countries with large populations of educated English speakers willing to work for significantly less money. Legislatures in 35 states have introduced bills seeking to address the issue, usually by banning the state from contracting with companies planning to employ offshore workers. Intense lobbying by business groups has helped prevent passage of those bills in other states. Business groups say a ban would be illegal and could prompt other countries to retaliate by preventing U.S. companies from doing business with foreign governments."
The Associated Press via The Los Angeles Times: Tennessee Targets Outsourcing (Registration required)