Forrester: Outsourcing Evolving

Offshore outsourcing evolving into a more global network, says Forrester

September 14, 2004

1 Min Read

CAMBRIDGE, Mass. -- Offshore outsourcing is evolving to a more sophisticated model according to Forrester Research, Inc. (Nasdaq: FORR). What used to be a simple one-hop from the US to India, for example, now includes work being done across a global network of multiple, offshore locations that delivers services at even lower cost. As a result, suppliers are shifting their focus from serving the needs of local clients, or supporting remote operations of multinational firms, to expanding their talent pools in developing areas like China and Southeast Asia. New research from Forrester further defines this new low-cost global delivery model (GDM) and finds that none of the IT services vendors is leading in its adoption.

To assess the large investments IT services vendors are making in a low-cost GDM, Forrester compared the capabilities of the three major onshore suppliers (Accenture, EDS, and IBM), and three offshore suppliers (Infosys, TCS, and Wipro). Using its Wave(TM) methodology, Forrester evaluated the suppliers against 60 criteria, reflecting a fully developed low-cost global delivery model, and found that while the six suppliers are making a broad range of GDM investments, no one is a clear leader yet.

"The grouped ranking of the vendors is an indication that the move to a low-cost GDM is at the beginning of an evolution which will take place over the next three to five years," said John C. McCarthy, vice president, at Forrester Research, Inc. "As providers expand into new locations, develop new capabilities and increase GDM services, they will face unique challenges."

Forrester Research Inc.

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