Government agencies have led the way rewriting the services landscape by breaking up mega-contracts and sourcing them to multiple providers.

Sharma said tier one providers face the dilemma of how to balance profitability and productivity imperatives with optimizing performance to the customer for long-term growth and market advantage.

"With this in mind, it is increasingly important to maintain the customer base and focus on longer term account profitability," she added.

Frost and Sullivan analyst James Turner said the big boys can no longer compete on price alone.

Turner said to effectively compete the big providers include offshoring in their offerings.