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Software Outsourcing

The Future of Software Outsourcing

According to the report issued by Forrester Research, software-jobs are getting lost in the United States because of Software Outsourcing conditioned by low salaries of IT jobs such as software programming or computer support. Nevertheless, still high paying analytical jobs such as system, network and research analysts stay in-house and dominate the market. Actually, there is observed a steady growth of jobs at rate of 4 to 5% every year in this market sector. Typically, these jobs require excellent knowledge base and idea about internal structure of IT systems and business processes. Software outsourcing not always can guarantee these qualities.

Jobs that not get affected by software outsourcing

Positions requiring higher skills such as system analysts and application developers are constantly increasing by 6 per cent a year. This situation is conditioned by increasing demand for these jobs. As an option software outsourcing can be delegated to to India or any other offshore software development country.

Reasons for decrease in Software outsourcing in future

There are no reasons to be afraid of this boom of Software Outsourcing. Analytical reports state that cost efficiency of software outsourcing is yet very high and exactly due to this fact growth in jobs like software programmer will be very insignificant. This will next result into very low increase in software programming jobs, in the next several years salary rise will also hardly reach 1 per cent. Actually, computer operators’ and database administrators’ rates will also rise at the minimal rate of 1 per cent. However, wages of computer research scientists and information system managers will rise highest at around 3.5 per cent every year, while salaries of analysts will grow 2 to 3 per cent yearly.

Offshore software development

Market researchers also forecast that software outsourcing market, which is currently still very cost efficient, will decrease by 2008. The basic cause for this trend is decreasing of salaries gap in the US and outsourcing countries. As the gap decreases, there will be no difference whether to outsource software development offshore or develop it in-house. In such a way will be reduced the basic advantage of offshore software development – cost efficiency. Ultimately, most companies will use their highly manageable in-house resources rather then offshore Software Outsourcing.