IT Management Slideshow: IT Offshoring Set to Increase in Near Future Before Levelling Off

By Don Reisinger  |  Posted 04-10-2012

Outlook 2016

In 2001, North American and European companies with revenues of more than $1 billion employed a total of about 8.2 million people in business services (including IT). By 2016, 3.7 million of these jobs will have been eliminated.

Outlook 2016

Why?

Productivity improvements and offshoring account for the elimination of these jobs, which will be partially offset by 1.6 million jobs created through economic growth in the same time period, according to The Hackett Group.

Why?

Knowledge Centric IT

The percentage of "knowledge centric" full-time equivalent IT positions (such as infrastructure development, app development and implementation, planning and strategy) located in low-cost geographies will increase from 26 percent currently to 37 percent in two to three years.

Knowledge Centric IT

Operational IT

The percentage of full-time equivalent operational IT positions located in low-cost geographies will increase from 36 percent currently to 50 percent in two to three years.

Operational IT

Levelling Off

While services industries in India, China and other low-cost geographies continue to grow, one important driver of this expansion - North American and European companies moving business services work offshore - will level off significantly during the next few years

Levelling Off

What's Going Overseas?

In 2009, 334,000 IT jobs at companies earning more than $1 billion in revenue in North America and Europe were lost to offshoring. That figure declined to 113,000 in 2011. By 2016, the Hackett Group predicts that 58,000 IT jobs will be sent overseas.

What's Going Overseas?

Business Services

IT is just one part of the overall business service sector studied by The Hackett Group. For this sector overall, North American and European companies with more than $1 billion in revenue have sent 1.7 million overseas.

Business Services

What's "Offshorable?"

In the broad business-services sector, 1.8 million jobs are currently considered by The Hackett Group to be "offshorable." There are just 3.3 million "non-offshorable" jobs in the business-services sector right now in North American and European enterprises earning more than $1 billion in revenue.

What's

Top Offshore Locations

38 percent of "offshorable" business services jobs will be heading to India in the next several years.

Top Offshore Locations

Top Offshore Locations

20 percent of "offshorable" business services jobs will be heading to Eastern Europe.

Top Offshore Locations

Top Offshore Locations

13 percent of "offshorable" business services jobs will be sent to China.

Top Offshore Locations