Outsourcing 'not something to get excited about' - analyst

A leading Asia-Pacific tech analyst claims the outsourcing of information technology and business processes offshore is "not something to get overly excited about," despite increasing international controversy over the migration of jobs to lower-cost countries.

Bob Hayward, senior vice-president with Gartner, told ZDNet Australia that only 1 percent to 2 percent of the dollars spent on information technology and business process-related outsourcing by organisations in Australia was offshore-related.

Even though this was expected to rise, it would still only account for five percent to six percent of dollars spent in two years' time, Hayward said.

While offshore outsourcing was the "fastest growing part of a growing market," at the end of the day, "it was not something to get overly excited about," he said.

However, there are indications that the practice of using offshore resources is rapidly becoming top-of-mind for Australian and New Zealand chief information officers. A Forrester survey of 57 CIOs across the two countries late last year revealed that while only 28 percent were presently using offshore resources, 47 percent either intended to use or would consider using offshore resources over the next year.

Hayward's remarks come amidst rising global controversy over the loss of jobs in countries like Australia and the US to lower-cost countries such as India and China. Tech heavyweights in the US were this week forced to come out fighting against political pressure from Congress over the loss of US tech jobs to offshore workers.

The tech companies, under the banner of the Computer Systems Policy Project, released a report stressing the need to keep international doors open so that domestic companies can remain competitive.

In its report, the organisation included preliminary policy recommendations for Congress to consider. It plans to have its members -- which include chief executives from Intel, Dell and Hewlett-Packard -- lobby lawmakers next month during the organisation's semi-annual meeting.

"Economic downturns and security issues spur impulses to protect specific sectors and markets and limit international trade and collaboration," the report stated. "Yet these measures often backfire. Countries that resort to protectionism end up hampering innovation and crippling their industries, which leads to lower economic growth and, ultimately, higher unemployment."

Congress has held several hearings about the outsourcing of IT jobs, and a group of lawmakers is urging India to create jobs for US workers.

Concern has grown in the US as an increasing number of tech companies lay off domestic workers and move the work to countries such as India. Employees in call centre support, manufacturing and software programming have been hit particularly hard.