Outsourcing Outlook (Outlandish)
By Lee Russ
Saturday, December 16, 2006 at 05:01 PM
If your neurological system is functioning properly and you've managed to avoid the coma state, you know that offshoring/outsourcing is alive and well, and making many workers in this country unwell.Here's a prediction on the "New Year" trends for offshoring of Information Technology (IT) and Business Process (BP) functions, from Global Services (apologies for the jargon, it's theirs, not mine):
- Small and medium enterprises...will become significant participants in services globalization.
- Firms will adopt the "cities of excellence" model, sourcing services from the best location.
- Multisourcing will dominate as mega-deals will be sourced to a mix of tier 1 and "best of breed" tier 2 service providers.
- IT/BP Outsourcing growth will be supply-constrained in an extremely strong demand market.
- Globally, service providers will witness a significant resource crunch.
- Engineering services, R&D Services, ERP, infrastructure management, product development and health care will see increased traction in 2007.
- Captives will see heightened activity in 2007, with parent companies considering spin-offs to cash out.
- Offshoring of customer-facing processes will slow down, and some may even move back onshore/nearshore.
- Tier 2 and tier 3 service providers will spread their global footprint by making significant overseas acquisitions.
- India will continue to be the leading destination for IT/BP Outsourcing. The Philippines will come in a distant second, and China will trail behind for next several years.