ABSTRACT
As we have seen in this book, the dynamics of business management keep increasing. And it is not only the flood of mergers and takeovers that influences business management and, through it, outsourcing relationships (Brown and Renwick 1996). The convergence of IT and telecommunication, and the increasing availability of bandwidth, continue to reduce the transaction and coordination costs associated with old-economy business operations. This enables companies to restructure their value chains and focus on core competences. Thus, new technologies gradually converge with the newly developed business models (Friedman 2005). Globalization is another factor in this process. Together with the rise of network organizations, globalization determines the manner in which companies are organized and how they collaborate. This development can also be
noticed in the field of IT outsourcing, where offshore outsourcing is on the increase. In fact, while companies increasingly turn to combinations of onshore, near-shore and offshore outsourcing, the attitude gradually develops into one of global sourcing (Carmel and Tjia 2005), which makes it possible to procure IT services effectively and efficiently. There is a clear trend towards increasing service delivery from low-wage countries. Percentages in the upper nineties or even a hundred are no longer exceptional. Interestingly, it is especially countries with closed economies and hierarchical political and economic structures that are changing themselves into important suppliers in this market. India, China and Russia are the prime examples, as well as some Eastern European countries (Friedman 2005). Gartner is also positive on these countries. Gartner expects for China a growth of 8.1 per cent in 2010, 9.0 per cent in 2011, 9.6 per cent in 2012 and 9.4 per cent in 2013 (Tang et al. 2009), which are slightly higher than the expected growth for India. For Russia Gartner expects a growth of the total size of the Russian IT market from 17.4 billion US$ to 29.2 billion US$ in 2013 (Marriott and Huntley 2009). Another consequence of this development is that large providers increasingly collaborate in the delivery of IT services.
