Outsourcing back in business
The global outsourcing industry started showing signs of recovery in the second quarter ended June although many companies now prefer captive operations to third-party outsourcing, shows a recent study.
By Harsimran Singh, ET Bureau |
NEW DELHI: The global outsourcing industry started showing signs of recovery in the second quarter ended June although many companies now prefer captive operations to third-party outsourcing, shows a recent study.
Outsourcing transaction volumes increased 10% quarter-on-quarter even as third-party BPOs continued to struggle, according to the study by Everest Research Institute, an independent research and analysis organisation.
���The paralysis of decision making which had almost crippled the industry late last year is now easing up. More and more pent-up transactions are being announced,��� says Gaurav Gupta, principal and country head of Everest Group.
The quarter saw 27 new captive centres coming up around the world, against 21 in the first three months of the year. Nine new centres came up in India including those of Barclays, Boeing, Credit Suisse and Honeywell.
���Companies are being cautious. They are being more thoughtful and strategic as they go in for the captive strategy rather than expand into third party model in the current environment,��� Mr Gupta said.
Nearshoring too continued to gain ground with 11 new centres announced in East Europe. Latin America also witnessed significant increase in market activity with eight new centres coming up.
According to the report, annual contract value (ACV) has also increased by 10% from the last quarter. Despite the downturn, BFSI vertical grew 26%. Some of the large deals in this sector are AXA Sun Life���s 15-year contract with Capita worth $805 million and National Bank Financial seven year contract with IBM worth $367 million.
Everest also cites recent geopolitical and macroeconomic events in Argentina and proposed amendments to the US tax code to pose potential medium-term risks and thus require monitoring.
Outsourcing transaction volumes increased 10% quarter-on-quarter even as third-party BPOs continued to struggle, according to the study by Everest Research Institute, an independent research and analysis organisation.
���The paralysis of decision making which had almost crippled the industry late last year is now easing up. More and more pent-up transactions are being announced,��� says Gaurav Gupta, principal and country head of Everest Group.
The quarter saw 27 new captive centres coming up around the world, against 21 in the first three months of the year. Nine new centres came up in India including those of Barclays, Boeing, Credit Suisse and Honeywell.
���Companies are being cautious. They are being more thoughtful and strategic as they go in for the captive strategy rather than expand into third party model in the current environment,��� Mr Gupta said.
Nearshoring too continued to gain ground with 11 new centres announced in East Europe. Latin America also witnessed significant increase in market activity with eight new centres coming up.
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According to the report, annual contract value (ACV) has also increased by 10% from the last quarter. Despite the downturn, BFSI vertical grew 26%. Some of the large deals in this sector are AXA Sun Life���s 15-year contract with Capita worth $805 million and National Bank Financial seven year contract with IBM worth $367 million.
Everest also cites recent geopolitical and macroeconomic events in Argentina and proposed amendments to the US tax code to pose potential medium-term risks and thus require monitoring.
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