2005: A Great Year for the Outsourcing Industry

  • March 9, 2011
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By Chiena Bondoc

Outsourcing has become a big aid to many who engaged in this industry. The clients, the servers, economies of countries that serve as outsourcing destinations – all of them have been benefited by outsourcing. But on the contrary, to some, it was such a pain. Workers despise it. Politicians condemn it. And even one TV newsman speak ill of it almost every night.

But in spite of these mutilations done against outsourcing, the year 2005 has turned out to be one excellent year for the Outsourcing Industry. And according to a new data released, companies are outsourcing work at record levels.

As indicated by the consulting firm Technology Partners International, which issued the data, the number of outsourcing contracts boosted up 9% in 2005 to 293. It also says that it’s the most deals perceived in a single year.

Businesses are actually spending less on outsourcing though the number of deals is rising. That is for the reason that a mounting amount of the work is performed in chosen outsourcing destinations where labor is low-cost.

Meanwhile, big U.S. outsourcers like IBM and EDS are setting off their own facilities offshore to stay competitive. Additionally, cutting down contract values is the growing propensity among businesses to dish out work in smaller amounts and for a shorter period. According to TPI, the total value of contracts given access to in 2005 dropped 5% to $75 billion.

Outsourcing is contentious for critics say American workers pay the price for businesses’ want to employ labor in countries with dubious employment practices. Democratic presidential challenger John Kerry famously called executives who outsource “Benedict Arnold CEOs”. CNN anchor Lou Dobbs frequently allocate entire programs to the issue under the banner “Exporting America”. So far, nevertheless, most legislative efforts aimed at holding back offshore outsourcing have not succeeded to pass Congress or state legislators.

Still, not all work that is outsourced is bound for foreign shores. The cosmic majority is still performed locally, despite popular insights. Actually, outsourcers are giving a boost to their labor forces in the United States. As said by the Labor Department, payrolls among IT services firms grew in 2005 by almost 32, 000 workers, a 2.7 % profit for the year.

SOURCE:
http://bakit.com/outsourcing/report-2005-a-record-year-for-outsourcing/

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