COMPUTER BUSINESS REVIEW

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Issue Date: September 2004 (es)

Viewing every shore as an offshore critical to global economic evolution

1 September 2004

As arguments for or against offshore outsourcing intensify, the boundaries will continue to blur between domestic and offshore business and IT service providers throughout 2004-06, says META Group. Through acquisition and organic growth, the line between the two camps will largely disappear by 2006/07.
"The context in which 'offshore outsourcing' typically is used is completely misleading and simplistic. For every company establishing offshore outsourcing relationships in India, there is a foreign company establishing offshore outsourcing relationships in the United States," said Stan Lepeak, vice president of Outsourcing & Service Provider Strategies for META Group.
"Evolving into truly global (versus multinational) service providers - with global delivery, operations, and resource management models - means organisations must take advantage of every shore where supplies, capabilities, and efficiencies are justified, whether it is North America, Europe, or the Asia Pacific region."
Outsourcing in general and offshore outsourcing in particular are manifestations of a long-running shift in how organisations gain and maintain competitive advantage. They represent a transition from vertical to horizontal integration and specialisation. According to Lepeak, this broader trend is not changing anytime soon, despite anti-offshore sentiment.
"Offshore outsourcing represents a continuation of ongoing economic evolution, and multiple perspectives - not just laid-off workers - must be considered when assessing its overall impact and value proposition," said Lepeak. "Geopolitical and protectionist backlash issues will grow and nip at offshore services, but overall will do little to slow services globalisation."
For more information contact META Group, Pinda Qutywa, 011 880 5640, pinda.qutywa@metagroup.com


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