IT Management Slideshow: IT Offshoring Set to Increase in Near Future Before Levelling Off
By Don Reisinger | Posted 04-10-2012Outlook 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.
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.
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.
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.
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
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.
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.
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.
Top Offshore Locations
38 percent of "offshorable" business services jobs will be heading to India in the next several years.
Top Offshore Locations
20 percent of "offshorable" business services jobs will be heading to Eastern Europe.
Top Offshore Locations
13 percent of "offshorable" business services jobs will be sent to China.
