First Quarter 2010 Part 1 of 4: New Outsourcing Techniques in Play
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For the first quarter 2010, expectations and estimates are high, buoyed by the continued recovery of the economy from the recession. And although there have been job cuts and closing of centers in some outsourcing companies such as Convergys (NYSE:CVG) who is laying-off of 677 people in Albuquerque in the US as it closes its center there; the outlook still remains positive.
Creativity has become a must for outsourcing companies now as they have to work harder for their bread and butter. The continued economic recovery and the increase in competition is slowly driving down prices of commodities and services that once were outsourced to cheaper counterparts globally. Thus some companies are adopting non conventional techniques to expand their business.
Infosys (NASDAQ:INFY) is one such company who’s currently adopting non-conventional strategies by deciding to further their expansion efforts towards smaller cities in India rather than the bigger cities. A highly unprecedented move to say the least since in years past, companies have been focusing on global expansions in regions such as the Latin America’s, and only in urban rather than rural areas.
Other corporations such as Capgemini (EURONEXT:CAP) are adopting techniques employed by Indian BPO’s which is hiring fresh graduates from campuses in order to expand their workforce. Costs will be low considering that salaries would not have to be so high to start off, however with the recovery in sight and many companies now able to provide the salary increases that was, in the not so distant past, withheld due to the recession, then attrition will most likely increase as the months pass.
Meanwhile, another provider, little known company Harva, is increasing their workforce by hiring only women from rural areas and training them to work in the business process outsourcing industry. The women are trained in English as well as for the project itself. The work may be tedious to say the least but employing this kind of strategy should inspire more loyalty in their workforce as well as enhancing their company’s public image by providing the women with stable jobs.
And even with these techniques in place, outsourcing companies will still have to become more innovative in order to gain expand their business. Increasing competition and customers tightening their belts are still affecting the industry. It will be very interesting to see what new trends will emerge and what other methods companies will employ to gain new contracts as the year progresses. It is still a time-constrained race after all to win these contracts, especially now that a quarter of the year has already come and gone, precious little time is left.
This article is part one of a four part series of reviews on the first quarter of 2010.
Author: Audrey B.
Tags: BPO, CAP, Capgemini, Convergy's, CVG, Harva, Infosys, INFY, Offshoring, Outsourcing
May 6th, 2010 at 3:18 am
Outsourcing services are really in-demand today. Many countries like India, China and Philippines provide this kind of services. Thanks for the post.
May 28th, 2010 at 2:40 am
Outsourcing involves delegating some operations to an external entity, which is usually specialized in managing that operation. Outsourcing emerged on the business world as a method to focus a company’s energy and resources on some core-activities, where most of the value is created, while delegating non-core activities to external suppliers that can execute those operations more efficiently and with reduced costs. Thanks for sharing this informative post.