the unsustainable growth of IT Salaries in india has clearly made the justification for outsourcing that much tougher on a cost-only basis. and now, CIO magazine’s research shows that outsourcing to domestic companies costs more than in-house IT, and outsourcing to off-shore savings are only realized by large corporations.
heartening to see that india maintains it’s lead position as the go-to destination for outsourcing (92% that outsource have presence in india), and china is a distant second. quality remains an issue and it probably work itself out as many software testing/training companies (e.g. edista testing, stag ) are doing brisk business bridging this gap.
more on this PDF published by NASSCOM (Tracing the evolution of IT Services Market in China), and a good overview on outsourcing to india. in my view, outsourcing is about going where the talent is, and not about buying cheap talent. and that will continue as long as sufficient tech talent develops domestically.