Sunil Mehta, vice president of the National Association of Software and Service Companies (Nasscom) in India, estimates that U.S. companies will save up to $11 billion in 2004 by outsourcing to India and that India will purchase $3 billion in high-tech imports from the United States in that time.

"The primary benefit to moving IT offshore is cost, and the only thing that's holding it back is building up the capabilities offshore to do the work," says Ron Hira, chairman of the R&D policy committee with the U.S. branch of the Institute of Electrical and Electronics Engineers (IEEE), a nonprofit research and advocacy group. "So unless you could come up with a way that markedly advances U.S. workers productivity so that they could produce a higher-quality product faster than they do today, there is no economic incentive to keep the work here."

The trend toward offshore outsourcing has only just begun. Indeed, in a survey by CIO Magazine, 67 percent of respondents did not begin offshore outsourcing until after 2000. According to Gartner, offshore outsourcing is just beginning to hit the mainstream, with 80 percent of companies saying they will discuss it in 2004. The biggest cause of U.S. job losses since 2001 has been the U.S. economic downturn. The offshore shift of many IT jobs is also a factor. By some estimates, there are more IT engineers in Bangalore (150,000) than in Silicon Valley (120,000).

Meta Group estimates that at least one-third of new IT development work for big U.S. companies is done overseas, with India the biggest site. And India could start grabbing jobs from other sectors. A.T. Kearney Inc. predicts that 500,000 financial-services jobs will go offshore by 2008. U.S. state governments are increasingly using India to manage everything from accounting to their food-stamp programs. Even the U.S. Postal Service is taking work there. Auto engineering and drug research could be next. By 2008, forecasts McKinsey, IT services and back-office work in India will swell fivefold, to a $57 billion annual export industry employing 4 million people and accounting for 7% of India's gross domestic product.

Outsourced Bookkeeping and Financial Services

Small businesses are now benefitting from a growing trend among large corporations who have found significant savings and business advantages in outsourcing their bookkeeping. Books are the heart of any business. Without accurate financial data, business owners can't know where they've been and can?t analyze their business trends to know where they are going and what areas to focus on.

Small businesses and non-profit organizations are skilled at providing their products and services, but managing an accounting department is not part of their core competencies. As a result, processing their financial records costs many small companies much more than it should (typically 25-40% more)

Outsourcing some or all of their basic bookkeeping and accounting functions to a professional helps business owners avoid both inaccurate balances and employee "headaches" such as help wanted ads, training costs, absenteeism, and fringe benefits like vacation time, sick days, 401Ks and medical insurance.Outsourcing frees business owners to concentrate on building their businesses, instead of doing the books or managing a bookkeeper.