During the third quarter of the year, the Information Technology outsourcing market saw its first substantial decline in twelve months. The transaction volumes fell for both the Information Technology an d Business Process Outsourcing markets, this is by seven percent and 12 percent respectively. The average contract value of Business Process Outsourcing transactions plummeted by 50 percent. The average contract value for the Information Technology increased by 14 percent.
They will need to see a few more quarters to determine if it is the downturn trend, the global outsourcing and offshoring market is beginning to show signs of slowing growth in the selective areas. Even though a decline in activity, it remains cautiously optimistic in the medium term. Given the level of a new location and activity by the service providers. The Information Technology service providers opened a 32 delivery centers in the third quarter compared to 17 the previous quarter. By announcing ten new locations, the HP led the way followed by Dell which is announced four. The Convergys, IBM and Tech Mahinara announce three centers.
The double-dip recession would leap to increased outsourcing in the organization, more than 40 percent of corporate Information Technology leaders. A second downturn would result in layoffs. The Hfs Research also surveyed that the outsourcing providers and analyst and found that 61 percent of the providers and 44 percent of advisors said that revenues would increase over the next six months if the economic situations worsens. It is about 16 percent of the advisors and six percent of providers said by the revenue would decrease. The one-fourth of the advisors and 21 percent of providers would remain the same while the 15 percent of the advisors and 11 percent of providers is too early to tell what will happen with the revenue.
The corporate Information Technology organizations may have no choice however to look for help outside the organizations of the financial situation continues to deteriorate. They made so many cuts in the previous downturn-in some cases to the bone-that outsourcing might be only the option for further productivity gains. Those Information Technology decision makers considering outsourcing more are not just looking for lower costs. The immediate cost cuts was a strong impetus. Many organization shy away from public outsourcing announcements when unemployment is a high and layoffs are looming. Sending some remaining work to third parties can actually boost morale in corporate Information Technology.
People can only request managers to increase the numbers of direct staff reports and have them take only so much extra work, until people get to the point of a negative returns from your staff output. The outsourcing can provide the opportunity to reenergize the top talent by bringing in the new resources and eliminating the ongoing cost-pressure.
REFERENCE:
http://www.bpowatchindia.com/bpo_news/outsourcingit/november-09-2011/it_outsourcing_providers_could_profit_from_double_dip_recession_.html
http://www.mis-asia.com/mgmt/outsourcing/it-outsourcing-providers-could-profit-from-double-dip-recession/
http://www.cio.com/article/693436/IT_Outsourcing_Providers_Could_Profit_from_Double_Dip_Recession
http://202.138.100.134/news/it-outsourcing-providers-could-profit-double-dip-recession-192862011
