Outsourcing Global

 The first flickering was seen in the 1970s and 1980s. However, it was during the 1990s that GSO really took off. Worldwide, GSO is expanding rapidly, now involving sub-contractor countries as diverse as Ireland, China, Russia and Chile. However, India remains the unquestioned leader, registering average annual growth of more than 40% over the last decade and developing some US$3.3bn-worth of software for foreign clients in fiscal year 1999/20001. Indian firms now develop software for nearly one-third of the Fortune 500.

IS outsourcing has been ‘normalized’: come to be seen as a normal part of a company’s Portfolio / Case studies of management procedures. The metaphor of outsourcing has changed from wild beast to be tamed, to beast of burden to be harnessed. Sub-contractors move from arms-length hazards to potential partners. Whilst the steps outlined above remain important, an additional aspect has therefore been added: the nature of the client-developer relationship. Successful management of that relationship by both partners shows the potential for long-term, co-operative benefits.

Clients have therefore been keen to normalize GSO and to move up the value chain, in order to increase the benefits of outsourcing. These benefits include not merely the greater savings just noted, but also improved access to local labour and to the local IT market. Sub-contractors, too, are happy with the greater income, greater control, and greater learning to be derived from such moves.