Global outsourcing activity shows Q2 growth

The global outsourcing market saw a 12% increase in transaction volumes with continued growth led by Business Process Outsourcing (BPO) services, BFSI sector deals contributing one-fifth of overall global market activity, and North America and Europe driving three-fourths of all global transactions.

Indeed, figures released in the latest Market Vista report, produced by BPO market activity increased by 15% and 33% in transaction volumes and ACV respectively.

The BFSI sector in particular saw a 41% increase in transactions, with most contracts were signed in the banking sub-sector; volume recorded was double over the previous quarter.

As for location, offshore activity saw 32 delivery centres established in Q2, the majority of which in Asia, followed by Eastern Europe and Latin America.

The figures also revealed that centre delivery in Eastern Europe fell to nearly half the levels observed during the first half of 2009. This was mostly owed to the impact the recession and economic crises in Greece, Spain and Portugal have had on demand.

While activity in Asia has slowed down, the region appears to be recovering faster than other emerging markets locations.
China appears to be slowly establishing itself as an outsourcing hotspot, although currently its capability renders it an attractive offshore destination regionally (i.e. Japan, Korea and Southeast Asia).

However, according to Everest’s research, China still lacks the right characteristics to attract European and Northern American offshoring business. At the top of the list, sufficient numbers of experienced project managers able to deal with North American and European clients.

China is not likely to be a contender to India or the Philippines – at least not for the next five to seven years.


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