Two-fifths of development now outsourced

Slashed IT budgets have led increasing numbers of user organisations to outsource and sometimes also offshore new development work, with now over two fifths farming out to a range of countries headed by India.

According to the upcoming Meta Group 2004 Worldwide IT Benchmark Report, 41 per cent are now going down the outsourcing route, using consultants, contractors and others in addition to outsourcing companies.

"IT budget cutbacks have left IT managers little choice but to outsource if they are to get their development projects completed," said Meta executive VP Howard Rubin.

Recent stories have shown companies increasingly outsourcing for reasons of quality as well as cost, though the move remains a political hot potato.

Although India leads the way as chief recipient of this work, the rising stars, says Meta, are Russia, the Philippines, Ireland, Israel and China.

The analyst house has also calculated the areas where staff turnover this year has been highest and lowest - low levels typically denote an economy where IT jobs are harder to come by, staff holding on longer in positions because there are fewer opportunities to move on. Bottom of the churn list was Canada. Top, signalling a strong sector, was India.

Overall, worldwide turnover fell in 2003 to 8.2 per cent from 11.7 per cent in 2002.