As financial markets continue their search for the bottom, offshore IT outsourcing offers an attractive option for companies that want to squeeze costs out of their operations. To meet what it sees as a growing demand for inexpensive application development and business process outsourcing, Accenture revealed Monday that it has opened offshore facilities in India and the Czech Republic.
Accenture's Indian facility in Mumbai (formerly known as Bombay) specializes in Windows 2000 and Java 2 Enterprise Edition application development and management. The service provider plans to employ 500 programmers and managers at its Mumbai site by August. Operational since July, the site hosts six Accenture clients. The Czech Republic site in Prague, which also opened in July, hosts financial and accounting services for two Accenture clients--one in the chemicals industry, the other an energy company. The Prague facility employs about 150 programmers and managers. Accenture's other offshore sites in Spain and the Philippines have each been open for about 10 years.
"We're seeing growing demand for outsourcing business processes and development," says James Hall, managing partner of technology business solutions for Accenture, whose outsourcing business was $1.98 billion in fiscal 2001, or 17% of the service provider's net revenue. Depending on the scope of the work being performed and the client's location within the United States, shipping a project offshore can reduce the costs by as much as 40%.
Accenture's formal announcement of its new offshore facilities follows Computer Sciences Corp.'s offshore expansion last week. CSC plans to partner with five IT software and service providers operating in India and one in Mexico to supplement its own outsourcing capabilities. "Developing a broad base of offshore facilities makes service providers more competitive," says Bill Martorelli, Hurwitz Group's VP of enterprise services. "This is becoming a necessity for the large integrators."