India and
the UK top the offshore charts as number one destination and
outsourcer respectively.
Despite recent
reports of a looming skills crisis, fraud and rising costs, analyst
firm Gartner predicts India will continue to take the biggest slice
of the outsourcing pie.
Its technology
infrastructure and cheap resources still make it the biggest honey
pot for outsourcing, attracting big names. Earlier this month
Microsoft announced it would double its India-based staff over the
next six months.
But China is
nipping at the heels of India as an outsourcing destination. Brazil
and Mexico are also rising fast, alongside “near shore” countries
in Eastern Europe.
Before choosing
any country, Gartner said firms should assess each outsourcing
destination on a cost-versus-risk basis and monitor labour
costs.
Forrester Research
also urged companies to think about new ways to assess potential
outsourcers, in its report, “Europe’s Services Firms Seek
Outsourcing Success”.
UK companies –
particularly in the financial and public sector – are the biggest
outsourcers in Europe, accounting for 39% of all deals, according
to Forrester. That fast growth means that outsourcers may have had
to cut corners to meet demand.
“Due to rapid
expansion, the outsourcing activity of some providers may be
immature, insufficiently structured and staffed, and reveal a lack
of skills,” said the report.
This could lead to
a lack of technical expertise at service providers. Service
providers are reallocating project managers and developers in
declining business areas into outsourcing, specifically
applications management and system operations.
Companies should check the technical qualifications and experience
of staff and ensure that if they have been moved from other areas,
they have been through proper re-education and training..