Patent filing describes IBM's new offshoring math
IBM last week filed a patent application for an offshore outsourcing methodology that's intended to help companies minimize the financial risks associated with sending work overseas.
IBM last week filed a patent application for an offshore outsourcing methodology that's intended to help companies minimize the financial risks associated with sending work overseas.
Companies flocked to IT outsourcing vendors as the recession unfolded last year and industry watchers expect more of the same as companies seek to slash fixed costs and deliver services with smaller staffs.
India's largest outsourcer, Tata Consultancy Services (TCS), reported for the quarter ended Dec. 31 flat growth in dollar revenue and an 18 percent drop in profits compared to the same quarter a year earlier.
In filings with the US Securities and Exchange Commission, companies that use H-1B and L-1 visas are alerting investors that it may become more difficult to obtain them in the future. Some firms are also noting that they don't know whether President-elect Barack Obama and the new Congress will help them get adequate numbers of visas.
One of India's key advantages as an offshore outsourcing location was its lower cost. But it may be losing this advantage to countries like Pakistan and Vietnam, which now offer staff at far lower costs than in India.
India's outsourcing industry is in private a little jittery after Senator Barack Obama's victory in the U.S. presidential election. But there is the expectation in industry circles that in the end economic pragmatism will prevail.
The collapse of Wall Street may prompt financial services firms to increase their use of offshore outsourcing and cut more jobs in the US on top of the layoffs they have already announced.
As many as 8 percent of IT workers have been displaced by offshore outsourcing, either through job loss or an involuntary transfer to a new job by their employer, which is twice the rate of workers in other occupations, according to a study based on data collected from some 10,000 people, which may be the largest survey of its kind.