Sourcing IT Services through a GDM is an irreversible mega-trend: Gartner

Sourcing IT work from anywhere in the world at the best prevailing prices is now becoming mainstream for application-related services. Early adopters are actively exploring beyond application-related services, including BPO, call centers and infrastructure services, according to Gartner, Inc. 

Gartner estimated that by 2004, all the US enterprises would consider global delivery sourcing as one of their top strategic sourcing options. More than 80 percent of US executive boardrooms would have discussed offshore outsourcing, and more than 40 percent of US enterprises would have completed some type of pilot, or would be sourcing IT services through a global delivery model (GDM), such as nearshore and offshore.

Providing a preview of the 'Opportunities for Indian IT Services providers' Track at the Gartner Summit 2003, July 16- July 17, at Mumbai, Partha Iyengar, Research VP (Covering Software and Offshore Sourcing), Gartner, said, "As the offshore providers increasingly compete with the incumbent global majors, and start to take business away from them, a competitive response by the global majors is giving rise to structural changes in the global services marketplace." 

He added, "This will see the emergence of a new order of 'top-tier' Global IT service providers, some of whom will be the current global leaders and some will be from the ranks of the Tier 1 Indian service providers." 

"As enterprises evaluate the leveraging of offshore resources, understanding the associated risks and developing mitigators will be essential to the long-term success of the strategy," added Rita Terdiman, VP and Research Director (Offshore Sourcing),
Gartner.

By 2004, 70 percent of enterprises would selectively outsource applications using a variety of Application Service Providers (ASPs), traditional outsourcers, niche applications vendors and offshore providers. However, Gartner analysts said enterprises must use structured evaluation and selection criteria or risk engaging with the wrong ASP offering the wrong level of service.

Cyber News Service