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This week EquaTerra’s analysts published the results of their 3Q07 Pulse Surveys. Against the background discussions of 2008 outsourcing trends – whether the demand will go significantly up or drastically down – the EquaTerra’s findings look pretty optimistic.
Particularly, the survey revealed that demand for Information Technology (IT) outsourcing is improving and is especially strong in the Europe, Middle East and Asia (EMEA) markets.
The pick-up in outsourcing demand is strong across all major industries, and is occurring even as growth in many vertical markets, such as financial services, is challenged by a range of economic and demographic challenges.
Key trends identified in EquaTerra’s 3Q07 Pulse Surveys include:
• Globalization of Outsourcing: The use of remote, lower cost offshore resources to deliver ITO and BPO services continued to grow during 3Q07. However, wage inflation in leading offshore markets like India and the falling value of the U.S. dollar negatively impacted margins of service providers with extensive offshore operations. This, coupled with changing buyer demands and the need for service providers to access talent with more diverse skills, further drove the expansion of delivery capabilities beyond the Indian market into locations like China, Central/South America and Central/Eastern Europe.
• Overall Outsourcing Demand Growth: 51 percent of EquaTerra advisors noted that demand for outsourcing services was up in 3Q07, and their outlook for 2008 was optimistic. Demand growth was strongest into the ITO market segment and in the EMEA market geography.
Stan Lepeak of EquaTerra noted: “The findings from our 3Q07 Pulse Surveys are generally positive in terms of the growth, maturation and globalization of both the ITO and BPO markets. While buyers still experience challenges with their outsourcing efforts, overall results have met or exceeded expectations, which has enabled outsourcing to become a commonplace tool that – regardless of broader economic and market conditions – buyers employ in an effort to improve their process delivery and reduce operating costs.”
Supposedly Q4 results will add bright colors to the analysts’ sentiments, especially regarding software development outsourcing in Central/Eastern Europe and Russia.