We have repeatedly pointed out that research is being increasingly done overseas. This article makes a strong case that this is just the beginning. First, Asian companies are doing their own research for their own market and this is fueling more innovation. Second, contract research organizations are opening office there to capitalize on the low cost. www.in-pharmatechnologist.com

Not a bad think piece on the future of outsourcing mainly about contract sales organizations. Computer Business Review

Excellent first person article on how the owner of TechnologyTailor.com used Elance.com to build a website for a fraction of the cost of using a normal programmer. Excellent read. We have used Elance on a number of projects and found it to be an excellent service. Chicago Tribune

It is common knowledge that outsourcing cuts costs. This article goes into more detail on how much is saved by whom.

Clearly, the outsourcing revolution has been won. Now, smaller companies are moving offshore to do their work. WSJ.com

Following on the last article, here is a list of just some of the incentives that the Pakistani government has given to help build the IT industry in Pakistan. Key incentives include tax exemptions until 2016 and 100% foreign ownership. Powerful stuff. PSEB

The government of Pakistan has put together a package of initiatives that will significantly boost the offshoring business. These initiatives have already created over $2 billion in direct investment into Pakistan. For instance, the government has dramatically increased the telcom infrastructure that is so necessary for offshore work. The Prime Minister Shaukat Aziz and the Minister of Information Technology Awais Ahmad Khan Leghari have spearheaded this effort.

Our own take is that the Pakistanis are perfectly positioned to take away a lot of business from the Indians. As the Indians have moved upstream, the Pakistanis can move into that area left by the Indians. The cost structure of the Pakistani IT industry is must lower than that of India thus creating a strong value proposition for outsourcing clients.Daily Times - Site Edition

Shrinking profit margins and a shortage of skilled workers and increasing concern over Wall Street prima donnas is leading Wall Street firms to offshore companies. This even includes such high value added things as research analysis. CNN

This important think piece contains some very important ideas and is highly recommended.

Forrester Research has released a new report that states that the global outsourcing industry could face consolidation due to low-cost global competition and broken business models.

It suggests that the current top line Indian companies will have to rely on acquisitions to compete with the global Western giants.

The report also delves into the role of the private equity funds in driving consolidation. The Hindu Business Line

Of course, there is no reason not to outsource certain kinds of content generation overseas. I have personally done this with sites that I am involved in (www.myhealthonline.com). The costs are obviously cheaper and the quality can be high. However, the topics need to be contrained to more technical items where cultural references are non-existent. In our case, we were looking for articles relating to health topics so there was no cultural knowledge needed, only technical knowledge and good writing skills. ContentSutra

One of the key transformations currently taking place is the concept of the hybrid outsourcer. What if you are an American company threatened by a lower cost Indian competitor? Simply set up an Indian sub to provide the same services as the Indian competitor at the same price!

There have been a plethora of news articles recently outlining this strategy. One key announcement came from IBM which stated that it was going to be increasing its number of employees to 50,000 in India. Capgemini said it will be increasing its Indian employees from 4,000 to 10,000 by 2007. Line56.com: Outsourcing Strategy Shift

A new study by the Association for Computing Machinery suggests that fears that foreigners would take US jobs are exagerated. In fact, the study suggests that outsourcing is a net contributor to jobs in the US. CRM News

It should come as no surprise that India has called for an opening of markets in computer services, health services, architecture, and engineering services at the current WTO in Geneva. India, and the other offshoring countries, need to make sure that other countries don't close their borders to the lucrative trade in offshoring. Financial Express

This is an excellent essay on the direction of outsourcing pharma research and development in India. Well written and, more importantly, well though out. Express Pharma

They are: 1. KPO jobs: in demand, 2. Consolidation and Fragmentation: hand-in-hand for KPO, 3. Small Towns will Join the Party, 4. Captives in India...for good, 5. Acquire to gain hold. NewswireToday

Recent scandels are leading Nasscom to start a national registry of IT staff. The 50 largest IT and BPO companies have already agreed to register their employees. vnunet.com

The legal outsourcing industry in Indian is $80 million industry already and looks to explode. Part of the trend is devoted to the legal issues surrounding traditional outsourcing but a lot of it is doing the heavy lifting of Western lawyers. IBNLive

One of the key trends in offshoring is the development of outsourcing to nearby countries. As was mentioned in the previous story, Europeans are increasingly moving to Eastern Europe while Japan is moving to China. CRM News

India gets most of the attention but lots of European and American companies outsource to Russia. The high skill level and closeness to Europe are typical reasons for liking the Russians. IDC says that the Russian IT market is about $1.9 billion. The St. Petersburg Times

This interesting development has Microsoft and Tata setting up a software outsourcing joint venture in China. This pretty much sums up a lot of the trends going on now in the offshoring world. Forbes.com

Canadian research firm XMG predicts that a lot of companies will take back certain key outsourcing functions as outsourcing contracts expire. In addition, growth will suffer in a mini-backlash against outsourcing. Outsourcing in Asia Pacific will lose luster in 2006—XMG - INQ7.net

Sales rose 31% and net income by 28% but that still was slightly below Street estimates. Infosys Misses Earnings Estimate

The rise of the Internet was one of the major reasons why offshoring took off. Communication became easier and quicker and cheaper. VOIP is having the same impact. Skype to Skype "phone calls" are free, thus destroying another barrier to offshore work.

BPO's will have to go upstream to capture more business as their margins get squeezed. Billing rates for basic services have dropped to around $12 per hour for basic skills, down sharply from the $18 per hour several years ago. At the same time, labor costs have increased in the more expensive cities like Mumbai. Look for more skill based iniatives and for more focus on verticals. BPOs will have to sharpen their new skills- The Economic Times

The basic premise is that some offshoring may head to parts of Africa, such as Kenya, that have English language skills. Our take is that it is not likely to make much headway due to the poor communication infrastructure and education. Global Politician

Data security has been a hot button lately after news that some Indian BPO workers had stolen identity information. This Computerworld opinion piece has some interesting insights into the issue. For example, laws in the EU protect consumers much more stringently than US laws thus making the problem appear to be less important. Also, many countries, such as India, China, and the Philippines don't have strong privacy laws which creates another opening for thieves to steal identity info "legally". Computerworld

There are 112 anti-outsourcing bills working their way through 40 states in the US, according to this article. There were 107 bills in 2004, of which five became law, according to the National Foundation for American Policy in a new study. The Times of India

NASSCOM has just released a report on the BPO industry at the ITES-BPO Strategy Summit 2005 conference. The bottom line is that BPO remains a high growth industry with continuing high potential but that it will soon be maturing in the near future. BPO grew by over 56% during the last five years, faster than any other industry segment in India. Customer care remains the biggest segment but Finance is almost equal in revenue. Deccan Herald - Internet Edition

This is a good indication of how high the quality has become in China. FT.com

Well, why not? With VOIP and webcams, what differenece does it make where the tutor is? Webindia123.com

One of the major boosts to offshoring comes from the aging population of the Western industrialized nations. This is particularly true in Europe where countries like France and Germany actually have declining local population. This means that there is a shortage of willing young workers for IT jobs. This gap is easily filled by offshore workers. Navhind Times on the Web: Business

It looks like the acceptance of offshoring has opened the floodgates of competition. Prices are dropping! Price falls on contract renewals in buyer's market

This press release shows that just about any intellectual pursuit can be offshored. It looks like legal research will grow. Our take is that it will grow but will never approach the level of other offshoring projects. Patent Search Outsourcing to India

We believe that the fastest growing country in outsourcing will be China. The main reasons are the sheer mass of programmers and the dramatic cost savings over other offshore centers. We have been outsourcing since 2000 and know that the Chinese are producing high quality programmers. True, they can't speak English very well but coding is done in programming languages. In addition, most communication we have with our coders is through written communication where their English is much better.

We have predicted in the past that the Indians and Japanese will increasingly outsource their commodity programming to China in the coming years. The Seattle Times

We have been talking for some time about how India and China will develop differing roles with India moving to the higher end of the value chain while China does the commodity development. We have also felt that the Indian should be using the Chinese and Pakistanis as their outsourcing partner.

This article talks about how India and China are working together and gives an excellent outline of the future. Highly recommended. Financial Express

This is clearly not going to help the case of offshoring. Still, it could have happened anywhere and just shows the need to create solid security processes. The Times of India

Short wrapups of some of the presentations. Gartner Outsourcing Summit: Reporter's notebook

This agreement will create more links between more cities in the US and India. Computerworld

I have a sneaking suspicion that the press coverage of outsourcing is either going to get much better or much worse!. Either the new journalists in India will be much more positive on the trend that created their jobs or the remaining UK journalists will now embark on a last ditch campaign to discredit offshoring. Extra! Read all about it! Yahoo Finance

It's fairly obvious that China will be the major competition to India in the coming years. However, it is interesting to read what a senior person in the industry says about it. Interesting insights. Financial Express

The government of Russia said that they are committing $650 million over the next five years to attract more foreign investment and the establishment of a local infrastructure as a way of boosting the offshoring industry. silicon.com

No real surprises here the detail is interesting. InformationWeek

The attention grabber is that Gartner expects 30% of IT jobs will be offshored by 2015. Gartner says that roughly 5% are offshored now.

They are also looking for an increase in offshore research and development to increase from the current $1.25 billion to as much as $12 billion by 2010. InformationWeek > Information Week