This Week: Why is everyone talking about offshore outsourcing?

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Title: TechTarget

A weekly newsletter published by TechTarget  September 12, 2003 >> Receive this e-mail as text  >> About this e-mail   In this Issue >> What is offshore outsourcing? >> What are the advantages of offshore outsourcing? >> What are the disadvantages of offshore outsourcing? >> Offshore outsourcing glossary  What is offshore outsourcing? by Ivy Wigmore, Assistant Editor This week we've gathered resources to help you learn more about why so many IT jobs are being outsourced offshore. Offshore outsourcing is the practice of contracting with individuals or companies in foreign countries to perform work that might reasonably be conducted domestically. One major reason firms contract with foreign workers or companies is to take advantage of lower pay rates, which can cost the employer as little as a dollar a day. A Gartner report forecasts that by 2005, the North American IT industry will be outsourcing work worth $160 billion. They report that 26 percent of the companies currently contracting outside the United States intend to double their offshore outsourcing budget within the next year. Offshore outsourcing is a controversial practice, especially when domestic unemployment rates are rising. A number of states, including New Jersey, Connecticut, Missouri, Maryland, and Wisconsin, are attempting to place restrictions on offshore outsourcing. What do you think about offshore outsourcing? Drop me a note and let me know. See our complete definition for offshore outsourcing http://searchcio.techtarget.com/sDefinition/0,,sid19_gci924479,00.html Read more: Commentary: Offshore outsourcing was the summer's hottest topic Article: Offshore outsourcing becoming 'in' thing for CIOs  What are the advantages of offshore outsourcing? According to a report in eCommerce Times, an enterprise typically saves 25 to 40 percent of their labor costs by outsourcing to countries with lower wage rates. Currently, seventy percent of the IT work outsourced offshore from the U.S. is awarded to India, followed by Ireland, China, Germany, the Philippines, and Canada. Proponents of offshore outsourcing maintain that the flexible business model offshore outsourcing offers is good for the U.S. economy and should not be feared. Deloitte: Offshoring will help U.S. economy Read more: Article: Ten criteria for offshore outsourcing Article: Gartner: Offshore BPO market to grow 38% in 2003 Article: Gartner: Offshore outsourcing horse has 'left the barn' Article: Global sourcing: What you need to know to make it work Article: Indian group claims outsourcing is good for U.S.  Where are the disadvantages of offshore outsourcing? IT analysts worry that user opposition to offshore outsourcing will inhibit U.S. firms from exploring cheaper foreign options. They're afraid that companies will need to divert resources to battle the misconception that U.S. jobs are being stolen. They point out that hidden costs for IT infrastructure, travel, and training can lower the overall savings by a substantial margin and make offshore outsourcing a risky venture. Most of all, they're concerned because they see offshore outsourcing as an irreversible trend. Read more: Article: Gartner: Outsourcers should beware of labor unrest Article: Offshore outsourcing hits IT pros in the paychecks Article: Offshoring IT jobs? Consider the risks, not just the rewards Article: Outsourcing snafus -- two big ones companies make Article: Offshore outsourcing: Navigating the opportunities and risks Tip: Experts reveal hidden costs of offshore outsourcing  Offshore outsourcing glossary e-outsourcing global information infrastructure globalization outsourcing return on investment (ROI) Service Level Agreement (SLA) total cost of ownership (TCO) vendor FREE E-MAIL SERVICES! Select newsletters you would like to receive from the list below. CIO Briefing Executive Roundup E-mail    Not a member? We'll activate your membership with your subscription. A B O U T   T H I S   N E W S L E T T E R This newsletter is published by TechTarget, the most targeted IT media. Copyright 2003 TechTarget. All rights reserved. Contact Information: Lowell Thing, Editor [EMAIL PROTECTED] Margaret Rouse, Associate Editor [EMAIL PROTECTED] Ivy Wigmore, Assistant Editor [EMAIL PROTECTED] To unsubscribe from "Updates on new site content":   -  Reply to this e-mail with REMOVE in the Subject line   Please note, unsubscribe requests may take up to 24 hours to process; you may receive additional mailings during that time. A confirmation e-mail will be sent when your request has been successfully processed.