Outsourcing on the rise

A new study by the Hackett Group projects that companies will increase their use of offshore resources by 50 percent in the next three years while cutting costs by up to half through the use of cheaper overseas labor. "We were surprised with the speed and increase of companies moving forward with this," said Michel Janssen, chief research officer at Hackett.

Technology Partners International, another consultant, predicted that 2008 could be a record year for offshoring contracts. It said contracts awarded in the first six months were worth more than at any time in the last three-and-a-half years, and the volume is projected to grow by 10 percent to $87.4 billion.

Gartner, a technology research firm, said India remains the top offshore location, but China, Russia and Brazil are gaining ground. Gartner predicted that offshore spending by American firms will grow by 40 percent in 2008 and that European firms will increase spending by 60 percent.