IT outsourcing reaction

Every company providing information technology outsourcing services is being asked by clients how they can substantially reduce costs by shifting work offshore, says William Sweeney, vice president of global government affairs with EDS. "In the commercial sector, if a major [IT service provider] and talking to a major customer about a possible client engagement, if you do not have an offshore component, do not even talk to them anymore," he told a recent press gathering in Washington, D.C. "It9s changed dramatically. They9ve almost come to expect that to be price competitive -- and with the customer in the driver9s seat setting prices for their services -- you have to have an offshore component."
Shifting high-tech service jobs offshore is a trend that is accelerating, says Arup Gupta, president of TCS America, an IT services firm based in India. "In a very serious, competitive environment, companies have to concentrate on their core competency and they want to outsource everything and reduce cost and therefore we are seeing the trend toward offshore outsourcing increasing," he says.