Lehman Brothers head of Global Outsourcing believes that American IT companies are on a diet but they still believe outsourcing will save significant cost. Key take aways are as follows,
- IT investment has become strategic and necessary for the competitiveness of the firm’s business. Hence, it will continue to be built out, even in this environment.
- Significant benefits (including costs) remain for offshoring because costs in India and China are still less than one-third of the costs in
- Likely to offshore even large, complex projects and use the savings to invest more in new technology.
- China fast emerging as an important alternate offshore destination after India due to lower costs, geographical proximity (to Japan and Hong Kong) and diversification of risks.
- Do not see any change in our strategic outlook unless things become really bad and the firm wants to stop investments in IT.