June 21, 2004

Europe's Offshore Outsourcing Plans

Business Technographics Europe

by Manuel Ángel Méndez

with David Metcalfe, Andrew Parker, Joost van Kruijsdijk

Executive Summary (This is a document excerpt)

Enterprises in Western Europe have already embarked on offshore activities; 27% of them are significantly committed to vendors operating in low-cost locations like Mumbai or Budapest. Internal cost reduction is the key factor for 98% of execs surveyed when considering whether to go offshore, although communication, cultural, and geopolitical barriers keep a large percentage of firms away from offshore projects. Today, 66% of Western European firms surveyed that work with offshore providers use India-based vendors, mainly for custom apps development and implementation. The outcome? Offshore activity will result in jobs like software development and IT operations leaving Europe: By 2008, 12% of companies using or planning to use offshore providers will offshore more than 1,000 jobs.

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