By Indus News Wire
NEW YORK — Outsourcing providers around the world predict that demand for their services is expanding rapidly, and they are adding staff and investing in new services to meet expected growth, according to a recent survey from Duke University’s Offshoring Research Network and PricewaterhouseCoopers.
The survey of 514 outsourcing service providers in 50 countries found that the industry is transforming due to the emergence of new providers around the world and efforts of existing outsourcers to expand into new markets. Outsourcing companies in North America and India, which have long dominated the industry, are being challenged by competition from Latin America, Eastern Europe, and Asia, in service areas such as contact centers, business process outsourcing, and information technology outsourcing.
According to the survey, a large number of service providers expect to begin new software development and IT-service contracts over the next several years. The number of service providers planning to offer new finance and accounting, human resources, and innovation services more than doubled from the previous year. Overall, 62 percent of service providers said they plan to expand the scale of their existing offerings, according to the survey.
“Growing competition has transformed the outsourcing industry into a global race for market share,” said PricewaterhouseCoopers Managing Director Charles Aird. “India’s success as the world’s back office has motivated other developing countries with well educated and under-employed populations to seek to duplicate their experience.”
Although India remains the outsourcing market leader, other emerging economies are seeking to expand into the sector. Among those efforts, the Chinese government has designated 20 cities as outsourcing hubs in an effort to attract more international investment, while the Philippine government has declared outsourcing a priority industry.
However, only 16 percent of Indian service providers see competitors from other emerging economies as a threat the survey found.
The survey also found that the economic crisis of 2009 reemphasized the importance of cost savings and efficiency improvement as the top strategic reasons for outsourcing, followed by access to qualified personnel.