Offshore Outsourcing A Swot Analysis Of Essay

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Information Systems Management
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K. G. K. Nair & P. N. Prasad



A professor at the department of business administration, College of Engineering,
Thiruvananthapuram, Kerala, India. He can be contacted at b A faculty member at the State Institute of Rural Development, Kottarakara, Kerala, India.
He can be contacted at
Published online: 21 Dec 2006.

To cite this article: K. G. K. Nair & P. N. Prasad (2004) Offshore Outsourcing: A Swot Analysis of a State in India, Information
Systems Management, 21:3, 34-40, DOI: 10.1201/1078/44432.21.3.20040601/82475.6
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K.G.K. Nair and P.N. Prasad
Global trends indicate that IT spending will increasingly go to offshore solution providers. This article demonstrates the use of a SWOT analysis technique for identifying the strengths, weaknesses, threats, and opportunities associated with a potential IT outsourcing location. The factors assessed include business conditions, physical infrastructure, IT infrastructure, financial institution and government support, and various labor characteristics specific to a region: the state of Kerala in India.

LOBAL TRENDS INDICATE THAT MORE and more IT spending will go to offshore solutions providers (Nasscom and McKinsey, 2002).The worldwide IT recession is compelling companies across the world to cut down costs and shift their operations to the countries having lower costs. While U.S. companies have been the early adopters of IT outsourcing, an increasing trend toward this model is also being witnessed in parts of Europe.According to a Forrester Research Survey, while the average percent spent on offshore providers was around 12 percent during the year 2002, it was estimated to grow to over 28 percent by 2004.
Fueling this trend has been an increasing focus on business process outsourcing (BPO).
For example, in January 2004, Mike O’ Brian, the Minister of State for Foreign Affairs and
Commonwealth for the United Kingdom stated:

K.G.K. NAIR is a professor at