New Delhi: Offshore outsourcing is projected to be the world's fastest-growing information technology (IT) industry segment till 2007. "The significant cost-saving typically associated with global sourcing and continuing economic malaise in the US has created extraordinary interest among enterprises for cross-border service delivery options. Consequently, this market segment is among the few, globally, that is getting venture capital and private equity funding," says Bob Hayward, senior vice-president, Gartner APAC.
Terming the global sourcing an "irreversible mega trend," Gartner cites the increase in the number of potential 'nearshore-offshore' options available today. While in the past India emerged as destination of choice, there is now a consolidation at an international level with tremendous current and latent options for customers.
Existing and emerging nearshore and offshore outsourcing destinations | Nearshore | Offshore | | Current priorities | Canada
| India, Ireland, Eastern Europe, the Philippines, China | | Long-term prospects | Mexico, the Caribbean, Chile | Russia, South Africa, the Middle East, South America, Western Europe | Source: Gartner 2003 Commenting on the global services landscape, Rita Terdiman, vice-president and research director (offshore sourcing), says: "The early adopters among North American enterprise buyers consistently turned to Indian external service providers (ESP). However, over the last six months, this has started to change. "Vendors worldwide have begun to leverage the cost arbitrage and new vendors are now appearing on the customers' request for proposal (RFP) list. Each category of vendors comes from a different heritage and has a unique set of competitive 'assets'. Going forward what will emerge is a set of 'global players' rather than the notion of US or Indian vendors." A similar trend is seen with the top 10 business process outsourcers, where through 2004, most US-based ESPs will establish or expand their capabilities offshore to compete effectively on cost (0.8 probability). These organisations will endeavour to develop a stronger multi-process focus, while their investment in cross-border service delivery will provide them with required resource leverage. Given the increased interest in outsourcing overseas, Debashish Sinha, principal analyst (offshore BPO), says: "What we will now witness is a trend wherein the large, global players acquire smaller companies with knowledge of local [offshore] resource pools, culture and business practices. Many providers are evaluating acquisitions or joint ventures of smaller outsourcers looking for exit options."
|
