Outsourcing Potential 2010 – How Does It Look Like? Part 2

Another pronounced trend of the coming year shows up in the shifting global markets. The survey by the global consultancy PricewaterhouseCoopers (PwC) and Duke University’s Offshoring Research Network stated that the outsourcing 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,” the survey revealed.

Near-shoring has gained momentum among companies considering outsourcing services. Growing competition has transformed outsourcing industry into a global race for market share where emerging economies are rapidly seeking to expand in the sector. In particular, Central and Eastern Europe has revealed its potential as a strong rival grabbing its market share on the global scale. In our previous post we’ve drawn your attention to the latest Everest research featuring EPAM Systems as a leading vendor from the CEE region challenging some established global leaders in the software outsourcing industry. This year’s NOA predictions also touch upon this trend noting “Russia will increase in prominence on the world stage”.

Apart from that, NOA’s annual predictions scrutinize over such issues as public sector deals growth, growth of green technologies and ‘green sourcing’ arrangements, innovation in services and products, and a declining trend in signing big contracts.

Douglas Hayward, analyst at IDC, draws our attention to the shift in the outsourcing models and states that in the new decade outsourcing suppliers will increasingly be paid depending on the volume of services used. “2010 will see a strong increase in the use of outcome-based payment models, as enterprises extract better value from service providers. Outcome-based models allow enterprises more easily to scale service consumption up or down, making costs more variable. […] They will cease to be seen as experimental, and will become accepted as a normal part of the contract toolkit,” he says.

Source: EPAM

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