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Global Outsourcing Market Grew At an Annual Rate Of 6 Percent

By Madhubanti Rudra, TMCnet Contributor

In its recently published “Market Vista: 2010 in Review,” market research firm on global services, Everest Group said that the global outsourcing market continued to steadily grow in 2010.

During the past year, the industry maintained an annualized growth rate of 6 percent and witnessed a surge in the transaction value reaching to a 36-month high in the fourth quarter. Business Process Outsourcing (BPO) transactions increased 12 percent during the same period.

In the report that tracked key developments in the outsourcing and offshoring industry in 2010, Everest Group further revealed that transaction volumes in North America and Europe were higher than 2009 volumes by 20 percent and 17 percent respectively.

This, according to the research firm, indicates the revival of markets in the respective regions.

According to the report, the market recovery was led by traditional industry verticals, such as BFSI (banking, financial services and insurance), and buyer geographies, such as North America.

In a press release, Everest Group said that Market Vista: 2010 in Review includes an analysis of outsourcing transaction trends, captive-related developments, market activity by locations, location risks and opportunities, key service provider developments, and implications for sourcing industry stakeholders. The report compared market activity in 2010 with preceding years to demonstrate the evolution in the outsourcing market.

The study highlighted a number of interesting facts. It showed that although Asia continued to lead offshore activity, offshore adoption also spread to other locations.

While 39 new delivery centers opened in India, other countries did not also lag far behind.  Thirty-two new centers opened in Eastern Europe followed by 27 in Latin America, 25 in the Philippines, 16 in China and six in Africa.

“There is a positive growth outlook for the global sourcing market in the near term, driven by renewals and expanding scope of existing contracts, tapping into new buyers in new geographies and expanded use of global sourcing. Demand from North America is likely to pick up with recovery in the overall macroeconomic environment and demand from Europe should pick up also. In the medium to long term, restructuring, integration, and redefinition of sourcing strategies by large financial services companies are likely to drive significant growth in outsourcing and offshoring," Eric Simonson, managing partner of Research noted in the report.

Market Vista reports comprise key developments among 20 global service providers. The company said that traditional service provider profiles include Accenture (News - Alert), ACS Xerox, Atos Origin, Capgemini, Convergys, CSC, AON Hewitt, HP Enterprise Services, IBM, Dell Services and Unisys. Offshore-centric service provider profiles include Cognizant (News - Alert), EXL, Genpact, HCL, Infosys, Mahindra Satyam, Tata Consultancy Services, Wipro and WNS.

In related news, Everest Group appointed cloud computing expert Scott Bils as partner last month, to play a leading role in developing the firm's Next Generation IT practice.