Outsourcing: countries riding the wave
CIO Insight Magazine released "The Global Outsourcing Report" - and boy, it states that three quarter of all US firms did outsource some of their information technology activities in 2004. This is probably just the beginning. Information technology is the part of a company where companies feel most comfortable in outsourcing - its been a couple of years that it is being done.
However, the number clearly states that companie outsource more and more of such activities with more to come. The next activity to outsource will probably be in the HR department of a company - activities such as payroll or benefits can easily be outsourced - and will than continue into marketing. A recent Businessweek wrote, that there are trends to outsource innovation and R&D and raised the question, if this is now too much.
The impact is dramatic - on countries, companies and individual. Half of those companies mentioned in the survey above state that they have cut full-time jobs as a result of the outsourcing initiative - imagine, what will happen if the individuals don't take the time to upgrade their own skills.
"Twenty countries have emerged as the leading technology outsourcing destinations in 2004. China, Costa Rica, the Czech Republic and Hungary round out the top five countries. Looking forward ten years from now, 30 countries are featured in the future index, several of which are not listed in the current index for 2005. The Report predicts that in 2015 the top five outsourcing destination will be China, India, the U.S., Brazil and Russia."
What do you think of the results? I think that competition between countries will become more intense. There will be a clearly staggered ranking. Countries on the the top of the ranking will have to provide a lot more value to stay on top, while those at the bottom will be faced with intense price competition.
The big question is: What comes next for many countries, after the outsourcing wave becomes the "new normal"?
(By Asia Business Consulting)
However, the number clearly states that companie outsource more and more of such activities with more to come. The next activity to outsource will probably be in the HR department of a company - activities such as payroll or benefits can easily be outsourced - and will than continue into marketing. A recent Businessweek wrote, that there are trends to outsource innovation and R&D and raised the question, if this is now too much.
The impact is dramatic - on countries, companies and individual. Half of those companies mentioned in the survey above state that they have cut full-time jobs as a result of the outsourcing initiative - imagine, what will happen if the individuals don't take the time to upgrade their own skills.
"Twenty countries have emerged as the leading technology outsourcing destinations in 2004. China, Costa Rica, the Czech Republic and Hungary round out the top five countries. Looking forward ten years from now, 30 countries are featured in the future index, several of which are not listed in the current index for 2005. The Report predicts that in 2015 the top five outsourcing destination will be China, India, the U.S., Brazil and Russia."
What do you think of the results? I think that competition between countries will become more intense. There will be a clearly staggered ranking. Countries on the the top of the ranking will have to provide a lot more value to stay on top, while those at the bottom will be faced with intense price competition.
The big question is: What comes next for many countries, after the outsourcing wave becomes the "new normal"?
(By Asia Business Consulting)
posted by Andreas @ 2:39 pm
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