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| More European firms look at India for offshoring: Forrester |
| BS Reporter / Chennai/ Bangalore Nov 09, 2009, 00:37 IST |
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As firms try to cut costs by taking up offshoring, many European firms are changing their preference from Eastern Europe to India. While the percentage of IT services that go offshore — especially from the non-UK market — is very small, Forrester’s Enterprise IT Services Survey, North America And Europe, Q2 2009 shows an improvement in adoption of global delivery.
Forrester’s survey shows that more than 60 per cent of European firms intend to send their work to India. This count is more than that of any other single country or group of countries - for example the CIS region or Central Europe. “Nearly 50 per cent of the firms that currently offshore or plan to offshore in the next 12 months plan to increase their spend on Indian resources. A close look at these companies shows that 20 per cent of these firms plan in fact to increase their spending by more than 10 per cent compared to what they spent in 2008,” says the report.
Forrester recently surveyed 300 European enterprises on their IT services plans where respondents were IT executives in budgeting and IT services sourcing and found that a large number of companies are cutting their overall budgets. “Clearly, economic pressures and cost-cutting drivers are visible in firms’ budgeting decisions. All three top European markets show a moderate budget cut, with more than 60 per cent of UK firms cutting their IT budgets. While there is talk of economic recovery, it is not yet reflected in firms allocating money for technology expenses,” says the report.
Compared to Forrester’s survey in 2008, the current research shows a drop of more than 20 per cent in the number of companies that were thinking about starting an offshore initiative for the first time. This means that in the next 12 months, few first-time offshore users might send their work to locations like India. But experienced offshore clients are extending their usage further. The companies that witnessed offshore benefits in the past are optimistic about continuing and expanding their offshore usage. These firms report that they will either continue ramping up their offshore work or will use offshore resources wherever possible, adds the report.
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