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A new report by IDC on IT outsourcing trends in the Middle East says that spending on IT outsourcing in the UAE increased by more than 700% last year, albeit from a small base, while services relating to hosting infrastructure rose by nearly 69%.
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Offshore Outsourcing IT has indeed become an unavoidable part of the business world. And it is springing up a world of changes to everyone directly or indirectly associated with it. While outsourcing is helping companies to dramatically lower their costs and as a result drop prices to increase demand for their products or services,
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It is natural for companies that consider offshore outsourcing IT to be concerned about a lot of issues, varying from those relating to security to intellectual property rights. These are valid concerns that should be addressed before outsourcing your software development needs.
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According to analysts at the Indian division of US based independent technology and market research company Forrester, despite rising salaries, India will continue to be an attractive offshore location for software development and other IT services.
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Russia is slowly making its presence felt in the global offshore IT outsourcing market. As a result, some multi-national IT companies have started investing in the country. The main reason for Russian growth is its low-cost yet high quality IT services. The country also boasts of a large number of talented IT professionals.
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It is important to remember certain factors while outsourcing to offshore locations. There is a tendency to outsource and forget till it is time to receive the results. This often leads to the failure of the outsourcing contract, as the success of an offshore contract often depend on fine-tuning things on the domestic front - getting the onshore right.
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Clients who have outsourced their IT operations get tangible benefits in terms of a higher return on assets (ROA) and earnings before interest and taxes (EBIT) and lower selling, general and administrative expenses (SG&A)
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Outsourcing is no longer a strange happening. And offshore outsourcing has become a global business in itself. Information technology (IT) outsourcing is an important segment of the global outsourcing business. IT outsourcing transactions require careful planning, analysis, negotiation, execution, management, and complex legal agreements.
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As outsourcing boom continues in the Indian hemisphere, country's IT biggies have all showed strong first-quarter results. Infosys Technologies opened the flow of good news reporting a stellar 50.4% expansion of its bottomline. In the days that followed, the other three biggies of the Indian tech world---market leader Tata Consultancy Services, Wipro and Satyam Computer Services---showed strong first quarter results.
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Indian IT giants are once again on a hiring spree, hiring by busloads and offering awesome deals. News from industry circles indicate that attrition worries continues, even though acquisitions added up employee numbers well before the onset of the hiring season.
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Statistics from various quarters indicate that the Indian IT outsourcing industry is keeping a scorching pace upward, firing furiously from all cylinders. Currently, India is the world's second largest exporter of software (after the U.S.), and is the main source of management and technical talent for over 40 per cent of new start-ups in Silicon Valley.
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Globally, Research and Development (R&D) Services are steadily growing in volume. More and companies are seeking out suitable partners to outsource their R&D work. Besieged by ever-increasing cost pressures, shorter product life cycles and numerous regulatory challenges in the west, many companies have shifted their research and development (R&D) base to countries like India and China.
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At present, the Indian software development sector is way ahead of others in the global offshore outsourcing market. However, latest Information Technology Industry news indicates that it is to face stiff competition from other emerging outsourcing sectors, in the near future.
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According to recent research by IDC, emerging markets for outsourcing, like China and India, are growing fast. It puts the total IT outsourcing expense by companies from the Asia Pacific region outside Japan at more than $16bn a year by 2010.
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A study by Chicago-based consulting firm Diamondcluster International has come out with many a revelation about the outsourcing world. It says that IT boom in India will soon be over due to labour saturation. The study lists China and Canada as emerging BPO hubs.
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Europe's public sector-driven healthcare industry is facing severe financial problems and hence forced to adopt a number of cost cutting measures. A major way to cut costs is to outsource whatever it can to cheaper locations. And IT operations are the first to be outsourced in such a situation.
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A survey by Patni Computer Systems in conjunction with IDC on the outsourcing strategies of FSI companies based in Europe revealed that, apart from India, Western Europe is the preferred outsourcing destination for European companies. The survey conducted at IDC's FSI conference in London reflects the views of CIOs, CTOs and business leaders of financial services and insurance (FSI) companies based in Europe.
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IT outsourcing industry continues to grow, if at a slower pace than in recent years. The field gradually steadies as industry pass the nascent stage. It is still growing, but CIOs are no longer shifting IT work to onshore and offshore outsourcing providers as fast as they can.
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A study by National Association for Software and Services Companies (NASSCOM) states that the IT industry in India will touch revenues of around 36-38 billion Dollars in 2006-07, presenting a growth rate of 25-28 per cent.
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NASSCOM Chairman Kiran Karnik speaks on the neccessity of education to have a quality workforce. The NASSCOM-McKinsey Report 2005 suggests that the total addressable market for global offshoring is approximately $300 billion, of which $110 billion will be offshored by 2010.
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According to a recent Datamonitor report, "investors from Western Europe and North America are likely to be impressed with Egypt's opportunities on several fronts, including: workforce, business culture, stability and industry development." The report concludes that, "Evidence in favor of Egypt as an offshore contact center location is compelling".
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Early this year, SAP CEO Henning Kagermann went on record stating India was getting expensive. He said, "We have decided to hire only a certain number there (India) and then commence to look around for other locations." Last month, Apple shut down its newly commenced Bangalore operations without giving any reasons. But analysts believe the reasons had to do with costs.
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A new report, commissioned by Microsoft and published on Wednesday, has warned that the UK faces a major shortfall in programming skills. Others, though, believe that a lack of information and relevant statistics makes it impossible to quantify any shortfall and instead point to industry successes.
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Experts have welcomed news that officials in India's technology hub Bangalore are preparing to tackle the city's massive infrastructure problems with plans to build five new high-tech satellite towns and increase investment in the city's creaking transport network.
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A survey by Chicago's Society for Information Management, examining IT workforce trends has revealed much about IT companies in US and their immediate future plans. Most companies surveyed disclosed their intention to shift more jobs to outsourcers. It was also learned that IT companies now prefer to employ professionals, with knowledge of business and industry, as well as those, with improved social skills.
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A number of study reports have reaffirmed the case of Indian supremacy in the Outsourced Product Development (OPD) market. It is estimated that, India accounts for almost 84 per cent of the outsourcing, with competition such as Canada, China and Vietnam way behind.
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Offshore Outsourcing has become one of the biggest industries in countries like India. And organizations in the west are increasingly turning to it for a variety of reasons. The variety and quantity of work outsourced to offshore locations have increased tremendously over the last few years.
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