Resumo de The Future Of Outsourcing ? Opportunities And Challenges For India

The Future of Outsourcing ? Opportunities and Challenges for India
Business Process Outsourcing (BPO) will include IT outsourcing and mainstream BPO expenditure is likely to grow worldwide by 10 per cent a year from $140 billion in 2005 to over $220 billion by 2010. (Source: Logica CMG study)
The industry is rapidly growing and maturing and India has established itself as a major outsourcing hub.
India is the world?s favorite outsourcing destination

India's share of the global offshore outsourcing market for software and back-office services is 44%. According to the National Association of Software Companies (Nasscom), India?s premier trade body of the IT software and services industry, technology and IT services exports in India were worth $17.2bn (¢9.5bn) in the year ended March 2005, a rise of 34.5% over the previous year. A further expansion of 30% in exports is predicted in the next twelve months, to reach $22.5bn. The US accounts for 68% of Indian exports.
Current outsourcing trends worldwide

Outsourcing in traditional areas like customer care, financial services, manufacturing, IT, ITES is growing.
Large multinational companies are investing in captive BPO units in supplier countries in multiple locations, to reduce risk and control quality.
Outsourcing is becoming more sophisticated. Customers are looking for business process excellence, speed to market, improvement in quality, benchmarking to world-class standards. CEOs are involved to ensure the long-term success of strategic offshoring decisions. On their part, suppliers understand that they must compete globally and that outsourcing will play a more transformational and strategic role for the client.
There is increasing global competition and pressure on margins from emerging lower-cost outsourcing destinations.
Risk factors for outsourcing like terrorism and war, disaster and disease make contingency plans a necessity.
The IT industry will see roughly 10 to 15% of its jobs move overseas during the next ten years, inviting more political debate.
For the past two decades, China has been growing at an astounding 9.5% a year and India by 6%. They are impacting the global economy and leading the outsourcing revolution.
Future outsourcing trends worldwide

Outsourcing expenditure will continue to rise.
More countries will find outsourcing attractive, creating a multi-polar world. Following the lead of the US and UK, the European Union markets will expand their offshoring programs, while Japan will increasingly look to China for its needs.
Clients will take greater control in driving and designing deals.
The interlinking of the supply chains brought about because of outsourcing will create stability as companies will put pressure on governments to avoid wars.
Risk factors and unexpected occurrences like war, terrorism, disease, natural disasters and economic upheavals can throw a wrench in the works.
The rising price of oil will put increasing pressure on companies to both utilize technology and outsource to remain profitable.
The rising price of oil will cause oil consuming countries like the USA to be less competitive resulting in more outsourcing to India and China.
India will show excellence in Services that require advanced English like Knowledge Process Outsourcing (KPO), Content and Medicine.
Political backlash over outsourcing is likely to lessen over time as economies strengthen and companies continue to reap the benefits of offshoring.
Technological power will shift from the West to the East as India and China emerge as big players in the global outsourcing market. The two countries have the size and weight to transform te 21st global economy.
By 2015 China will be No. 1, India No: 2 in the global top five outsourcing destinations.
Vendor focus will shift from basic skills, costs and processes to domain knowledge, transition challenges, change management, HR issues and governance.
Regional outsourcing hubs will develop as companies will take strategic near-shoring initiatives to minimize risk and leveragecultural and linguistic compatibility. The supplier countries are in the same time zone as their clients.
The large diverse Indian companies will face stiff competition from new focused smaller companies. Because these companies are able to focus and become excellent in one are they will be able to provide a higher level of service. In 2006 there will be a flood of companies targeting niche services.
Opportunities for India
Near-shoring as a business strategy
India can collaborate with other countries to leverage local knowledge of the business environment and language skills while providing its domain knowledge and technological expertise for successful outsourcing. For example, TCS has a Latin American arm based in Mumbai, India which serves an insurance client in Chile with a center in Uruguay as a near-shore location. Outsource2india has a collaboration with a company in NE India that leverages the unique talents of the people of this region.
Opportunity areas
Today more industries are where IT was in the 1990?s - knowledge based. Knowledge Process Outsourcing (KPO) may soon be the biggest revenue grosser in India as BPO companies move up the value chain in their service offerings. This includes:

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