Companies in the Asia Pacific region outside Japan will be spending more than $16bn a year on IT outsourcing by 2010, according to recent research.
Emerging markets for outsourcing, like China and India, are growing fast, IDC researchers say, but regional outsourcing spend is still dominated by mature markets like Japan, Australia and New Zealand.
IDC's forecast of $16.06bn in spending for 2010 does not include Japan, which spent $15.5bn on IT outsourcing last year.
But total IT outsourcing spending by Asia Pacific firms is expected to be split equally between Japan and the rest of the region by 2010.
Cultural issues have made many Asian companies relatively slow to explore the benefits of IT outsourcing, according to Arlo Franz, managing director of research consultancy TPI's Asia Pacific office.
For example, an executive's worth may still be judged more by the size of their department than by the results it produces, making outsourcing an unattractive proposition in such cases.
Some Asian companies in Korea, for example, prefer to maintain control by 'insourcing': setting up subsidiaries with lower-paid staff to handle work that might otherwise be outsourced.
"With popular reference of outsourcing in the region revolving around US outsourcing to India, the significance of the regional markets for IT outsourcing are often neglected," said Eugene Wee, a senior analyst at IDC's Singapore office.
"In the past 10 years, we have already seen significant spend by the mature Australian and New Zealand markets, but increasingly, companies within the Association of Southeast Asian Nations, India and China, are becoming more open to the idea of letting the experts take care of their IT ecosystem."
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