SMEs poised to join offshoring
The momentum of offshoring in the IT industry will increasingly become more globalised with newer locations and also see increased participation of small and medium enterprises (SMEs) in the years to come, according to Tholons, an investment advis...
By TNN |
BANGALORE: The momentum of offshoring in the IT industry will increasingly become more globalised with newer locations and also see increased participation of small and medium enterprises (SMEs) in the years to come, according to Tholons, an investment advisory and management firm.
Tholons providing the trends in services globalisation for 2007 said the SMEs driven by private equity investors will become significant participants in the globalisation of IT services. Tholons CEO Avinash Vashistha said the SMEs from the US and Europe who were earlier not participating either in offshoring or outsourcing their IT activities will increasingly be doing it.
This would also see tier II and III IT service providers expanding their geographical footprint essentially through an acquisition strategy. Mr Vashistha said, “2007 will see service providers undertaking M&A to acquire delivery capabilities, specifically in complimentary markets such as the Philippines, Vietnam and the emerging economies of Europe.”
The Tholons study said companies will be looking at creating newer ‘cities of excellence’ model for sourcing services from the best locations for their respective domain processes and services. These could be from cities such as Ho Chi Minh City, Buenos Aires, Colombo, and Dubai among others.
However, the trend of services globalisation will see India being the leading destination for IT/BPO activity, though it would come in for severe competition in the BPO space from countries such as the Philippines and Sri Lanka.
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Mr Vashistha said the current demand in the market will also see significant resource crunch in terms of manpower as the companies will have to constantly battle higher wages and attrition.Download
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