Pramod Bhasin, Genpact president and CEO, said that companies are investing on outsourcing services because they are embracing it as a new reality. 'Some will view this defensively. Others will use this offensively. Very few can ignore the level of savings and efficiency being delivered.'
Bhasin added that those who grab the opportunity and drive it as a strategic advantage will be able to focus more on their businesses because outsourcing changes the notion of what is core and non-core.
Given the continuous growth of the outsourcing demand, emerging locations like Ireland, Mexico, and Malaysia are gearing up to replicate the India story. These countries are working on meeting the clients' demands for contextual, linguistic, and domain knowledge, a 24/7 global delivery solutions and the flexibility to move work between locations or regions.
'Ireland, Mexico, and Malaysia, along with more established industry players like the Philippines and India, should observe market trends to be able to plan their business strategy,' Neo IT managing director Romeo Aquino said.
One trend in the industry is that smaller business deals are replacing mega deals. While the deals are smaller, their numbers are increasing, especially in Europe and in Asia. In the Philippines particularly, there will be around 10 major deals in 2007 as compared to 25 in 2004.
'The deals will not be very big, around $50 million to $250 million, but the good news in that is that there is room for niche players. Many companies like to be with small partners for personalized services,' Aquino said.
Another industry trend is that companies who outsource are slowly closing in on the core. Aquino explained that as the companies get used to the system of outsourcing, companies are increasingly bringing their core businesses into the picture.
'As operations become globalized, more and more applications are being outsourced, whether they are core or non-core. With more critical applications being outsourced, companies have increased focus on data security. Because of this increasing concern for security, 2007 will see great demands for data security certifications,' Aquino said.