Will India be still viable option for IT Outsourcing in 10+ years?
by
Ben Patel
India's Information Technology (IT) industry has flourished well since Y2K, with the demand for IT resources in India increasing exponentially over last 8+ years. Remember the time when you could get the services of three or more IT professionals for the cost of one IT professional in the US? Well, that time is over - companies have noticed a considerable change over the last 5 years:
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Jim Olsen's presentation "
The Hard Truth about Offshore Testing" at the
StarWest 2007 conference stated "Over last five years, salaries for experienced IT professionals in India has increased 12-20% per year where as the salaries of the experience IT professional in the US has increased 3-5%"
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Over the last 5 years, the value of US dollar has gone done by 20%. You could get Rs. 47.5 Indian Rupees in January 2003 Vs the Rs. 39.5 Indian Rupees you get in January 2008.
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With increased costs and the unfavorable exchange rate, you could maybe utilize two or less IT professionals for the cost of one IT professional in the US.
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Attrition rate for experienced IT professionals in India has increased over 15% or more. There are many cases where you start a project with 10+ members on the team, and at the end of the six months, you have a completely new team!
What happens if India's IT Professional Salaries continue to go up 12-20% compounded per year? What happens if the attrition rate continues to rise?
If these trends continue, work will move from India to other similar low cost countries like Egypt, and China. Is India ready to woes of unemployment like the US? Are there similar trends for other countries like Brazil and Argentina?
