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Mega-deal announced as new research suggests IT will be hardest hit by offshoring in the coming years

Pharmaceutical giant AstraZeneca has signed a multi-million dollar, five-year outsourcing deal with Infosys. The deal will be seen as both an endorsement of the Indian IT industry's viability in a downturn and a confirmation of the UK IT sector's worst fears.

The deal forms part of an operational transformation initiative that will begin in the UK, and that will see the Indian IT outsourcer provide application management services for many of AstraZeneca’s key business departments.

"The combination of Infosys’s outsourcing expertise, technology leadership and proven record in rationalising and standardising business process were all contributing factors to our decision,” said Richard Williams, Global CIO at AstraZeneca, in a statement.

AstraZeneca’s announcement lends weight to the argument that a tough economic climate will lead Western businesses to expand their use of offshore IT outsourcing.

Offshore future

The deal coincides with a newly published report from business advisory firm The Hackett Group, which found that offshore outsourcing is set to balloon. According to the report, nearly 400,000 back-office jobs, including IT, HR and finance, are expected to be outsourced offshore in the next two years – almost half the current total (850,000) already offshored.

The report, which was conducted during the past 30 days, meaning it canvassed opinion after the financial catastrophes of October and early November, also found that one in four IT workers will be stationed offshore by 2010, more than in HR and finance.

The IT department has already been the hardest hit by the recession, the report found. Just under a third (31%) of the Global 1,000 companies surveyed said they had either cut IT staff or frozen hiring in the IT deparment – more than in any other department.

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