More development work outsourced: META

IT development work is increasingly being outsourced, according to a report from a research organisation.

Research company META Group found that, on average worldwide, 41 percent of new development work is now outsourced. Last year 35.9 percent of new development work was outsourced to providers and external contractors.

This included outsourcing programming and business processes offshore, according to the 2004 Worldwide IT Benchmark Report.

Dr Howard Rubin, executive vice-president at META Group, said IT budget cutbacks had left IT managers needing to outsource in order to get their development projects completed.

“Going offshore and using the economics of offshore outsourcing have been the only competitive options left for larger companies since all the IT budget decreases of 2000, 2001, 2002, and even 2003,” Rubin said.

Worldwide, turnover rates for IT staff were 8.2 percent, down from 11.7 percent last year, according to a META Group statement. The research organisation said that these rates were to be expected when hiring was down. “Those who have managed to hold on to their jobs do not quit when the job market is depressed,” it stated.

India remained the preferred offshore company for outsourcing work. Russia, the Philippines, Ireland, Israel, and China were described by META Group as “the up-and-comers to watch”.