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Offshoring grows like Topsy

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Most mid-sized and large companies plan to offshore some of their services between now and 2009. Software developers in retail and finished goods manufacturers and operational staff in utilities and business service companies are the most likely to see their jobs going overseas.

Companies in France, Germany, the Netherlands and the UK were questioned for the survey and 75 per cent of them plan to offshore services before 2009.

Andrew Parker, a principal analyst at Forrester, told The Reg that the survey revealed a higher level of offshoring than expected. "Partly this reflects the kind of companies we spoke to - larger companies are more inclined to use offshore services. There are a significant number of UK companies within the sample and UK companies are more inclined to use offshore providers than their continental peers."

The main motivator for offshoring is still saving money, 87 per cent of French respondents said it was the main reason to move work abroad. Language barriers and cultural differences are still a barrier to offshoring - 85 per cent of German respondents said these issues had a negative impact on offshoring plans. French firms were less concerned - 40 per cent saw cultural and language issues as a barrier, but 92 per cent of French companies mentioned geopolitical risk and trade union resistance as an obstacle to moving offshore.

Of companies which already offshore some work, 66 per cent use Indian-based suppliers. Estonia, Poland and North Africa are gaining popularity.

Forrester talked to 247 IT decision makers, 89 per cent of which worked for companies with more than 5,000 employees. Three quarters of the companies surveyed have revenues of over €1bn. ®

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