The Next Offshoring Surge 'Basic Necessity' - InformationWeek

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IT Leadership // IT Strategy

The Next Offshoring Surge 'Basic Necessity'

Banks worldwide will dramatically increase the portion of their IT budgets devoted to offshore services from low-wage countries in the next three years, one study predicts. Offshore tech spending will rise from 6% of the $44 billion the industry spends on IT annually to 30% by 2010, finds a study by consulting firm Deloitte.

"Among larger institutions in particular, offshoring ... has become a basic necessity," Deloitte says. Reports of wage inflation eating into cost savings offered by offshore outsourcing are overblown, Deloitte says. Fifty-five percent of the banking IT execs it interviewed expect their offshoring costs to rise by less than 10% this year, and 36% expect costs to remain flat or decline.

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