India most popular location for IT outsourcing

25 January 2008
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25 January 2008 | Jake Kanter

India is the most popular destination for UK companies outsourcing their IT functions, research has revealed.

A study, which canvassed 110 of the biggest IT spenders in the UK and carried out consultancy EquaTerra, found that of the 57 per cent of UK companies that outsource IT, every one has some or all of their services based in India.

The report analysed £34 billion worth of contracts, which amounts to three-quarters of the annual UK spend on IT outsourcing. It found that Indian suppliers of IT services are steadily increasing their profile among buyers, compared with 2006.

Lower cost is the main reason for the move to the subcontinent, but over half the respondents cited other motives such as the availability of skills, suppliers' ability to be flexible and their quality of work.

Phil Morris, managing director at EquaTerra Europe, said in a statement: "Business people are making the decision to outsource to India because they can't find the same resources in the UK." He added that Indian firms are providing an excellent standard of service for buyers.

The results also showed the number of UK firms outsourcing IT services abroad increased, from 47 the previous year, to 57 per cent. In addition, 54 per cent said they planned to increase their offshore sourcing in the future.



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