Offshoring shows no sign of abating

Despite the controversy surrounding offshoring, a record number of outsourcing deals currently under negotiation are considering offshore destinations, India in particular.

by TPI
Last Updated: 23 Jul 2013

The new research by advisory firm TPI reveals that almost half of outsourcing deals involve offshoring the work to third country subcontractors. This compares with 28% at this point last year. The study also found that a greater proportion of the workload within each contract was moving offshore, almost half the value, up from 27% last year.

"The approach of many companies to outsourcing has matured to the extent that it is no longer a question of whether to offshore, but rather which elements and to what degree," says Duncan Aitchison, managing director international at TPI.

The biggest winner in this offshoring bonanza is India. The country now receives 5.2% of the total global value of offshoring contracts, compared to less than 3% in 2005 and just over 1% in 2004. The subcontinent is also experiencing a massive rise in the value (+284% since April) and size (+25% since 2005) of contracts it is bidding for.

New areas of expertise such as remote IT infrastructure work might also be added to the traditional applications in development and maintenance (ADM) and finance and accounting services.

UK companies have been the most enthusiastic consumers of offshoring services, with Europe lagging a little behind. Duncan Aitchison says that it is probably nothing more than a temporary blip, but the value of contracts signed on the continent is 30% lower than it was last year, whilst the UK has grown 9%.

Source: TPI

Review by Emilie Filou

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