Statistical data from various sources have all shown that Offshoring/Outsourcing is becoming��an economic imperative�� for ��high-wage�� countries, and the driving factors are globalization and impending labor shortages. This shortage in labor, drives up the labor cost which becomes the dominant factor that forces high wage countries to seek out low-cost destinations and this trend is poised to grow. The impact of IT offshoring to high-wage countries are multi-faceted.
While labor cost appears to be the primary factor on the surface, if one goes a little beyond the overall labor pool numbers, it is not difficult to uncover the deeper reasons, such as the dramatic differences in education (e.g. the number of college graduates in the US vs. India and China,) which is a more relevant factor to the IT sector in particular. Progresses in telecom infrastructure around the world and the benefit of globalization are other primary factors fueling the recent waves of offshoring/outsourcing.Government policies in Education, Immigration also have profound implications that could affect the landscape of offshoring/outsourcing.
Impacts of offshoring/outsourcing at the Individual, Executive and Organizational level are as follows -
Individual:IT professionals in the high-wage countries will move into the higher end of IT services with the lower-end positions farmed out. The low-wage countries, would see ever maturing IT workforce, taking on IT service jobs with increasing complexity.
Executive: Experiences and telecom advances would significantly lower the barrier of entry for businesses to establish offshoring operations. Competitiveness would be defined by how efficient the business runs with its offshoring operations not whether it has one. The offshoring challenge would also have dramatically influenced public policies, such as investment to education and research, immigration.
Organizational:Business organizations will become heavily ��distributed�� with members of the team in various remote locations with significant flexible, highly individualized working hours and diverse culture mixes.
For further details, refer to The Landscape of IT Outsourcing
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