News »Browse Articles »
Outsourcing industry shows sign of business recovery!
0
Outsourcing industry shows sign of business recovery!
The global outsourcing and offshoring industry continued to show signs of business recovery leading to increased momentum in the Indian offshore industry during Q3 2009, according to Everest Group. Everest`s `Market Vista: Q3 2009` study on global outsourcing and offshoring activity reports that the new captive set ups increased to an 18-month high in Q3 2009 compared to Q2 2009.
Offshore activity increased with 36 new supplier delivery centres established in Q3 compared to 30 during Q2. Twenty-eight new captives were established in Q3 2009.
Key verticals such as BFSI (banking, financial services, insurance) services and MDR (manufacturing, distribution, retail) contributed towards 36 per cent of deal signings and retained their dominant share in total transactions. North America also showed some signs of recovery with doubling of transactions in the BFSI vertical from the region.
The report says the market activity also increased for some emerging verticals such as healthcare where the transaction volumes doubled compared to last quarter.
Although there was a marginal decline of 10 per cent in the reported global transaction volumes (BPO volumes decreasing by 14 per cent and ITO activity reducing by eight per cent), there were signs of improvement in key geographies and verticals.
Eleven new captive centres were set up in India during this quarter, highest in any single geography. One-fourth of new supplier delivery centres were established in India; whereas India-centric suppliers witnessed increased transactions activity in Q3 compared to Q2.
The cost arbitrage opportunity for Indian cities improved with depreciation of the currency and reduction in operating costs. At the current momentum, the arbitrage is sustainable for about 20 years in both ITO and BPO services.
"The Indian offshore industry is growing on the back of improving demand and continued advantages of India as an offshore destination. India-centric suppliers are investing in delivery capabilities and setting up new centres," said Gaurav Gupta, principal and country head, India, Everest Group.
"The increase in the number of captive set ups reflect signs of recovery in the overall market. We expect the industry in India to continue this momentum in the last quarter of 2009 as well as in 2010," said Amneet Singh, vice president, global sourcing, Everest Group.
Offshore activity increased with 36 new supplier delivery centres established in Q3 compared to 30 during Q2. Twenty-eight new captives were established in Q3 2009.
Key verticals such as BFSI (banking, financial services, insurance) services and MDR (manufacturing, distribution, retail) contributed towards 36 per cent of deal signings and retained their dominant share in total transactions. North America also showed some signs of recovery with doubling of transactions in the BFSI vertical from the region.
The report says the market activity also increased for some emerging verticals such as healthcare where the transaction volumes doubled compared to last quarter.
Although there was a marginal decline of 10 per cent in the reported global transaction volumes (BPO volumes decreasing by 14 per cent and ITO activity reducing by eight per cent), there were signs of improvement in key geographies and verticals.
Eleven new captive centres were set up in India during this quarter, highest in any single geography. One-fourth of new supplier delivery centres were established in India; whereas India-centric suppliers witnessed increased transactions activity in Q3 compared to Q2.
The cost arbitrage opportunity for Indian cities improved with depreciation of the currency and reduction in operating costs. At the current momentum, the arbitrage is sustainable for about 20 years in both ITO and BPO services.
"The Indian offshore industry is growing on the back of improving demand and continued advantages of India as an offshore destination. India-centric suppliers are investing in delivery capabilities and setting up new centres," said Gaurav Gupta, principal and country head, India, Everest Group.
"The increase in the number of captive set ups reflect signs of recovery in the overall market. We expect the industry in India to continue this momentum in the last quarter of 2009 as well as in 2010," said Amneet Singh, vice president, global sourcing, Everest Group.