Firms considering offshoring should develop IT strategies to exploit the growing capabilities of Chinese and Indian IT consultancies and software developers, analyst firm Gartner has advised.
China and India are beginning to collaborate to offer UK firms sophisticated IT consultancy and software development services that will match the quality of Western suppliers by 2010, Gartner said.
"To stay competitive in the global economy it is imperative that IT organisations implement a 'Chindia' strategy," said Jamie Popkin, group vice-president at Gartner Research.
"Indian firms bring world-class software expertise and leadership in global markets, and Chinese partners have legions of capable, low-cost employees and greater know-how with clients in Japan, Korea and other Asian countries where English is less prevalent," he said.
Far from being simply a source of cheap labour, both countries will soon be able to compete for global business on competence and capability, said Gartner.
"China and India are producing some of the world's best-trained computer science and electrical engineering graduates," said Gartner vice-president Partha Iyengar.
"By partnering, Chinese and Indian enterprises will have access to complementary skills and resources and, in turn, will have the potential to offer a much wider array of services for companies looking to offshore."
In 1995-1996, India's exports of IT services were worth about $1m, and in 2004 they were worth $13bn. In 2000, India's share of business process outsourcing was worth $148m. In 2004 it was worth $3.5bn, according to Gartner figures.
The analyst firm said that UK companies still had concerns over what they describe as "challenging logistics, stifling bureaucracy and corrupt officials" in India.
"However, the vast majority of the global Fortune 1,000 companies have agreed that India is worth the effort," said Iyengar.
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