The India’s outsourcing crown is safe for now, as a serious competition is lacking in areas including the skills and infrastructure. The country assumed that a leadership position as a lower cost destination for servicing the back office needs of the major global corporations, however the recent such as the terrorist attacks in Mumbai and Satyam accounting scandal have threatened this. To their operations, while the attacks in Mumbai did not target the outsourcing industry, they know that the companies that have a captive operations or outsourcing providers in India took note of the potential for the disruption to their operations. Although even though other markets will be redoubling efforts to seize opportunities from India. No other country yet presents a serious threat as a key outsourcing destinations.
The China is still very much an emerging destination, it is debatable whether any other single country has the breadth and depth of skills, experience and the infrastructure to seriously challenge the India’s positions. The India-based providers is made of significant market share increases. In terms of the total contract value, the Indian outsourcers contributed 16 percent of the global market. They also accounted for over half of the Asia-Pacific outsourcing TCV-a first for the Index.
In the region’s outsourcing landscape, another indication of the country’s strength is that two out of the three mega-deals in the second half of 2008 went to Indian-based providers. The Mega deals defined by the TPI as worth over US$1 billion, numbered 12 between January and June last year. There was a record of 88 contracts in the region with a total contract value of over US$25 million, 50 of which were awarded in the second half. The 2008 TCV of Asia-Pacific outsourcing deals was US$12.3 billion, lower than the 2007’s US$12.7 billio. The contract value divided by its duration, it also fell from US$2.7 billion in 2007 to US$2.4 billion last year.
TCV registered nearly US$90 billion, while the AVC reached a record of a high of US$17.6 billion. The TPI typically covers the commercial outsourcing contracts that are valued over US$25 million. The new contract awards in the first half of the year that will be affected by the recessions. The industry players in the region will be prepared to respond to the market conditions and step up efforts to help clients to find near-term cost realignment opportunities. The transactions may be more piece-meal in the nature than big, multibillion-dollar transformation deals. They expect that the adoption of the outsourcing in the first half of 2009 was measured by the TCV levels that will be softer than the last year. It is still early to tell how long is the hesitation in awarding a larger-value contracts.
REFERENCE:
http://www.zdnetasia.com/indian-firms-still-lead-outsourcing-pack-62050627.htm
