Three-quarters of U.S. companies outsourced some or all of their information technology activities in 2004, and that percentage is likely to increase this year, according to a special survey on outsourcing and offshoring in the March issue of Ziff Davis Media's CIO Insight magazine. While a smaller percentage of companies are outsourcing those activities offshore (32%), half of them have cut full-time jobs as a result.
India is the most competitive and popular technology outsourcing destination in the world in 2005, according to the Global Outsourcing Report and, China will be the No. 1 technology outsourcing country in 10 years. The Global Outsourcing Report 2005 is the first-of-its-kind report to rank countries based on the opportunities, costs and risks they present for IT outsourcing, both now and in the future.
Outsourcing has become a supercharged issue, thanks to fears of job loss, but as New York Times foreign affairs columnist Thomas Friedman points out in an exclusive interview in CIO Insight's special March issue on Globalization, people need to be aware of the consequences of a flat world (his new book, titled "The World is Flat," will be published in April 2005). "There is no such thing as an American job. There's no job that's got your name on it. And you're going to have to get over that," he says.
And despite the sensitive political issues around offshoring, the strategy can provide huge corporate benefits in terms of productivity, prices, profits and wages. But companies need to be able to assess the risks and benefits of each country they're considering as an outsourcing destination.