What Should Enterprise Outsourcing Companies do When Long Term Deals Start to Decline?

It was widely reported today that long term outsourcing deals have recently been on the decline. This means that the offshore outsourcing mega deals that have been announced in the past, will be happening less frequently in the future.

The third-quarter developments in the global outsourcing industry of 2006 saw a decline in contracts by volume and value from the same quarter last year. The cause of the falling aggregate contact values can be tied to the decline in contract durations, especially for Information Technology Outsourcing (ITO) contracts. Since 2001, the average duration of a Broader Market contract has decreased 12 percent. In ITO, it decreased 18 percent, while for Business Process Outsourcing (BPO) it dropped 5 percent; as per the TPI Index report

But how is this going to affect offshoring companies based in India? It might not have a significant impact on their growth rates at all!

Therefore, while the global majors may see a slowdown in their growth, Indian companies will not do so. According to Nasscom, the Indian ITES-BPO segment continued to chart strong year-on-year growth at 37% for FY06. The IT body has also said Indian ITES-BPO exports have grown to USD 6.3 billion in FY06, recording a growth of 37%.

The figure is expected to grow to USD 8-8.5 billion in FY07. Net employment in the ITES-BPO segment has grown by about 100,000 in FY06, taking the total direct employment in this segment to 415,000, the body has said in its factsheet about the industry, as per the report.

Generally speaking, this means that the service provider companies most significantly affected by this news would be the giant onshore outsourcing providers. Overall, companies like Obian, Oceanwide, Omgeo LLC, OmniPod, Inc. Omniture, Inc. [OMTR], Oncontact Software Corporation, One Network Enterprises, One Voice Technologies, Inc. [ONEV.OB], OneClickHR plc, OneMind Connect, Online Insight, Inc., OnRelay, Onset Technology Inc., ONStor, Onstream Media Corporation [ONSM], Onyx Software Corporation, Open Country Inc., Open EC Technologies, Inc. [OCEIF.PK], Open Ratings, Inc., Open Software Solutions, Inc., Open Solutions Canada, OpenAir Inc., Openet Telecom Inc., OPIN Systems, Optas, Inc., Optiant, Optima Technology Corporation, Optimal Payments Inc., Optimal Solutions, Inc., OrderPro Logistics, Inc. [OPLO.PK], OrderWare Solutions Ltd., Orsus Solutions USA, Inc., OSIsoft, Inc., OTES Consulting, OTF Group, Inc., OutlookSoft Corporation, Outtask, Inc., OZ Communications, Inc. would not be too significantly affected, especially the ones with less than one billion dollars in revenues yearly.

KPO in India – Harnessing Offshore Brainpower of Knowledge Workers

KPO, a subdialect of offshore outsourcing, has a real focus on high brainpower work. This is the kind of work that businesses have typcially called on firms like Monitor Group, Mercer Management Consulting, IBM Global Services, Deloitte Consulting, Accenture, Gartner, A.T. Kearney, PwC Consulting, KPMG Consulting, Cap Gemini Ernst & Young, Marakon Associates, Hewitt Associates, Mercer Human Resource Consulting, Towers Perrin, Electronic Data Systems, or The Parthenon Group.

What is the best city in India for KPO? India is a country with over a billion brainy souls. It’s hard to say right away where the best city is … obviously, the places endowed with a great high tech infrastructure would be at the top of the list … and places near to a world renowned, prestigious IIT university. But, to start research on the subject, I would just recommend starting with the A’s! Cities like Abohar, Abu Road, Adilabad, Agartala, Agra, Ahmedabad, Ahmednagar, Aizwal, Ajmer, Akola, Aligarh, Allahabad, Almora, Alwar, Ambala, Amber, Amravati, Amreli, Amritsar, Anakapalle, Anantapur, Anklesvar, Anuppur, Araria, Arcot, Arrah, Aruppukkottai, Asansol, Ashok Nagar, Aurangabad, Auroville, Ayodhya, Azamgarh

For the feature part ot this post, please continue reading below for an article by an industry expert on KPO, Prajakta Chandrakant Dhote , Jr. Faculty Member in ICFAI National School, Chandrapur.

---

Knowledge Process Outsourcing is picking pace in India. In Knowledge Process Outsourcing the focus is on knowledge expertise. It is just the higher end of Business Process Outsourcing. Knowledge Process Outsourcing delivers high value to organizations by providing domain-based processes and business expertise rather than just process expertise. After reaping the benefits of outsourcing low –end processes to India, foreign companies are now trying to outsource the high-end processes to the country.In Business Process Outsourcing there is a predefined way to solve a problem. Business Process Outsourcing’s normally include transaction processing , setting up a bank account, selling an insurance policy, technical support , voice & e-mail based support. While in Knowledge Process Outsourcing the knowledge solution for various sectors is provided like- investment solution through their personal guidance about the information’s and insight of every investments option available today, unsorted data going through a black box and coming out as useful information.