What Price Outsourcing

By Scot Petersen  |  Posted 2003-12-22 Print this article Print

?"> What Price Outsourcing?

As eWEEK reported in June, General Motors Corp. is in the vanguard of a "third wave" of outsourcing, which seeks to break the huge single-provider contracts of yesteryear into smaller, more manageable—and profitable—chunks. As a result, GM is spending $1 billion less on IT than it did in 1996, said GM CIO Ralph Szygenda.

However, for many IT workers in 2003, the outsourcing wave hit home. Once one of the keys to cost cutting and growth, outsourcing—particularly offshore outsourcing—became a lightning rod itself this year, with thousands of jobs heading overseas and millions more expected to go over the next decade. Some states even considered a ban on the outsourcing of government contracts to offshore providers.

Dataquest Inc. reported in January that while only about 5 percent of 917 U.S.-based companies surveyed are using offshore resources for IT projects, offshore outsourcing will grow at a double-digit rate next year, well above the growth rate for U.S.-based IT services overall.

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