While reinstating the earlier projections of 3.3 million US services jobs going offshore by 2015, Forrester has increased its near-term numbers by 240,000 for 2005 in comparison with the November 2002 projections. The research and consulting firm now projects 830,000 jobs to shift offshore by the end of 2005.

The research firm says that in the past 18 months the onslaught of activity, visibility and debate around the offshoring topic has spurred its emergence and fostered an increase in overall offshore initiatives. The net result is that the near-term numbers for 2005 has been increased by 240,000 in comparison with the November 2002 projections which stood at 587,592.

John C McCarthy, Forrester Research, group director research, said that the political visibility has been unable to slow down offshoring. He says, “While the numbers in the near-term have increased, long-term we expect it to remain stable. This is mainly due to long-term issues such as attrition and people-related activities and also the complexity in managing the offshore operations.”

Offshoring, says Forrester, will be the catalyst for turning attention from growth to efficiency in the services sector of the US economy. By the end of 2003, 315,000 jobs had been shifted offshore.

Leading Indian suppliers like Satyam, Wipro,and Infosys have registered 20-40 percent growth during the past six quarters. They have broadened their services portfolio beyond simple custom development and application maintenance into business process outsourcing, packaged application implementation, and remote monitoring and administration of infrastructure. This has enabled them to capture up to 40 percent of the most sophisticated clients’ IT services spend.

US-based services and technology vendors like IBM, PeopleSoft, Agilent, and Accenture have scaled up their operations in places like India, China, and Philippines. IBM and Accenture alone have announced plans to add 9,000 employees in India by the end of 2005. For the IT services vendors, these offshore resources are being used for new BPO service initiatives, as well as IT.

Access to low-cost offshore labour, long a motivator for IT work, has emerged as the primary driver in the BPO segment as well. Even onshore vendors like IBM, Exult, and Hewitt Associates say that prospective clients are demanding an offshore component as part of most BPO proposals. IBM’s acquisition of Daksh was an admission that it needed to have a BPO operation in India to be competitive.

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