Third wave of IT outsourcing expected post-COVID

Third wave of IT outsourcing expected post-COVID

A recent Goldman Sachs report revealed that the third-wave of outsourcing is to be expected post COVID-19, following the previous ones in the years 2000 and 2008.

In the past, major crises have tended to lead to a sharp increase in outsourcing and even offshoring particularly to India, which has consistently experienced much lower wage levels for technology developers compared to the Developed Markets (DMs), amid an increasing annual base of engineering graduates.

Goldman Sachs said that the first two waves of IT outsourcing happened both due to a shift to cloud based infrastructure and the higher use of automation tools, forcing Indian IT firms in particular to look for new ways to sell IT solutions, shifting from labour cost arbitrage to business transformation through digital technologies.

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