Wednesday, March 10, 2010

Offshore Outsourcing Spending Creeps

IT's latest reports spending on information technology projects farmed out to low-cost places like India should grow by 1 percent this year, according to a report Thursday from investment firm Merrill Lynch.

"The report, based on a December survey of 50 United States-based chief information officers, also found that spending on offshore IT services represents a small but growing chunk of budgets allocated to IT services. In 2004, offshore IT services accounted for 1 percent of the budgets, but CIOs indicated that that figure will increase to 1.4 percent in coming years."

"We expect U.S. companies to increase jobs sent offshore in the next two to three years as they try to drive costs down and improve operating margins," the report said.

"Merrill's survey is the latest data point in an as-yet-incomplete picture about the scope and effect of so-called offshore outsourcing. Comprehensive data about the controversial trend has been lacking, but a $2 million government study is in the works."