Global outsourcing is alive and it’s kicking!

Lots of analysts had predicted slowdown in global outsourcing industry, some even predicted, it will eventually vanish after a decline, data shows a different picture, outsourcing industry is alive and kicking, its going to stay for longer period.

A recent report by IDG Outsourcing Index has concluded 2014 is the best year ever for outsourcing.

Data from the ISG Outsourcing Index, which measures commercial outsourcing contracts with annual contract value (ACV) of $5 million or more, show that fourth-quarter ACV surged 27 percent, to $5.8 billion, over the prior year as the number of contracts grew by 6 percent.

Asia Pacific particular saw sharp increase, ACV increased by 45 percent over the prior year, while contract counts climbed 11 percent.

These possibilities have emerged primarily in ITO segment but quite exciting to see Cloud Based HCM service providers (NAG & Ramco specially in APAP) also making significant growth. The report outlines the need to innovate, its going to be an uphill tasks in coming years.

India particularly has to revisit its offering, quantity will not make the difference, quality will. Business have stopped looking at the headcount and your potential to take work, they are looking at value add from those heads.

Few factors which will make the difference in coming years;

  1. What’s your scalabilty ? scalabity not in terms of increasing headcount which Indian companies have so far relied upon, scaling up the technology and infrastructure.
  2. Outsourcers will continuously ask; where is the value add ?. Majority of deals will not be simply service for but the benefit vendors give, it should have profitable proposition.
  3. Keep it simple and move to cloud, complex technology solutions are burden, its recommended that you move your business model to adopt cloud based solution. If you will not, someone else will.
  4. Customer Service skills are still essential, train your staff on compassion and listening. Technology is a enabler and not the final solution, your staff holds the magic key for success.

“The three great essentials to achieve anything worthwhile are, first, hard work; second, stick-to-itiveness; third, common sense.” – Thomas A. Edison

What recommendation do you have for successful outsourcing companies ?

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