Offshore Technology Services Make Best Of Weak Economy; Farming Out Projects To India; Outsourcing trend may get boost from economic slump as firms continue cost cuts.(INTERNET & TECHNOLOGY)

Byline: J. BONASIA

The U.S. economy remains decidedly cool, but at least one sector is heating up -- outsourcing offshore of information technology services.

Droves of large companies are contracting with offshore firms to cut IT costs and boost quality. Managers hire outsourcers for jobs that are outside their company's core strengths.

This trend is most widespread in India, home to a huge pool of educated, English-speaking workers. They write software code and staff customer call centers for a fraction of the cost of American labor.

"This is a hot market with a lot of interest," said Cynthia Doyle of International Data Corp. The offshore outsourcing market should nearly double in three years, says IDC, growing from $9 billion this year to $17.7 billion by 2005.

More and more firms view offshore outsourcing as a key business tactic, says Sandip Patel of IBM Business Consulting Services.

"Cost savings, quality improvements and access to scarce resources will make offshore outsourcing an imperative for any business with heavy IT or business processing needs in the coming years," he said.