Are IT services deals increasingly moving onshore?

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Lee Ayling, who heads up sourcing consultancy Equaterra in the UK, told me recently that he is seeing a trend for big businesses to move services back onshore.

This swing back to onshore services is seeing fewer deals provided from traditional offshore destinations, most notably India. More skills are now being based onshore. This does not mean Indian and other offshore companies aren't winning business just that more of the skills are onshore.

Ayling said two years ago 90 out of 100 deals might have been supplied from India. But he says at the moment about 30 out of 100 are supplied from India with the other 70 from multiple locations.

He says this is positive for the UK economy.

Will this trend continue or is it just a move by big business to keep the government and public opinion on their sides?

We have seen public opinion in the US turn against the idea of offshore services.

2 Comments

Interesting, if true. But just because the projects are moving onshore, doesn't necessarily mean there will be jobs for onshore IT workers. Wipro's curious inability to hire any of the tens of thousands of unemployed UK-based IT workers illustrates the fact that many of these providers will simply ship their cheap offshore workers "onshore" via the familiar ICT people-trafficking mechanism, with the eager connivance of the "UK" government, which seems more concerned to curry favour with Indian businesses than help retain or create skilled jobs for UK-based workers. And let's not even mention the inevitability of "UK" government ministers listening to the likes of Ovum and shipping even more public sector IT work offshore as well.

We are seeing a trend in the IT industry for business customers to expect greater agility and a more rapid response to their ever-changing business needs. This is even more-so in the world of software delivery.
In such an environment, the delivery project teams must be able to work very closely with the business, constantly demonstrating how they have achieved the business's latest priorities, and reacting to subtle changes and refinements.
This is VERY difficult to achieve when the delivery team is working within a different country, timezone, and culture. So, bringing projects back onshore is one logical step to being able to provide this level of delivery service, and it can be observed on a regular basis.
Off-shore teams will have a part to play in this delivery model, but it's a changing role, one which most off-shore delivery organisations are yet ready to undertake.
In the meantime, I foresee the smart businesses working more with local software delivery teams, as the shorter time-to-value will far outweigh the perceived savings from cheaper overseas resources.

Julian Holmes
UPMentors.com

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This page contains a single entry by Karl Flinders published on August 19, 2010 9:03 AM.

Massive UK job losses loom as change projects approach sign off was the previous entry in this blog.

Could China be about to reduce India's offshore IT dominance? is the next entry in this blog.

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