More than cost cutting, offshoring has become a bare necessity now. What was started out by GE and American Express half a decade ago as simple data entry and transaction and insurance processing now rolling in more critical and high end technology projects. Cost saving is also a big factor, undoubtedly, though it does not get pointed out by senior executives on account of saving their skin, an Indian programmer, on an average is paid 40 to 80 percent less than their US counterparts. Deloitte, the consulting firm doing a study on the banking sector says broadly a bank can save up to 40% of cost by outsourcing to cheap countries.
The study also says that, from present 6% offshore tech spending by banking sector will reach to 30% by 2010. More here
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