IT Services and Financial Sector Offers Opportunities to the Offshore Industry
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News abounds on the effects of the U.S. recession to the offshore community. Some reports say that the number of work to be outsourced this year is likely to fall, while others believe the recession would only fuel a company’s need to outsource to bring down cost.
Today, a report by the Hackett Group predicts an increase in the number of back-office jobs to be done offshore. The study titled “Companies Accelerate Globalization of G&A Processes in the Face of Economic Crisis” reveals that “Global 1000 companies will send over 350,000 jobs in IT, corporate finance, human resources and procurement to offshore labor markets in 2009 and 2010, bringing the total number of back-office jobs being done offshore to over 800,000.”
In fact, by 2010 the Hackett Group believes that one in every four IT jobs will be located offshore. Global 1000 companies were said to have gained more than $16 million in annual savings in their operations through back office outsourcing, and more than 50% of that amount came from IT cost savings. This number is predicted to grow further by about $30 million in 2010, which represents a third of the potential cost savings.
The Hackett Group’s Chief Research Officer Michel Janssen shared an interesting point when it comes to the issue of companies moving a step back from outsourcing as a result of current market conditions. “We’re in the middle of a mega-trend. We’ll have ups and downs. We’ll have terrorist attacks, and currency evaluations and depreciations, but the trend of using global resources from around the world is a 10- to 20-year trend”, says Janssen. Janssen’s view comes to show that in order to remain competitive, nowadays, companies don’t have much of a choice but to outsource.
Aside from the IT industry’s contribution to outsourcing, financial services are also thinking of accepting new forms of outsourcing. According to Andy Jones, Director at offshore consultancy firm Alsbridge, “Tough times mean banks and financial services firms may have to overcome their fears and embrace new forms of offshoring”.
As opportunities abound in IT and financial services, it’s now up to the offshore community to prove their capabilities in these sectors. In the recent “2009 eServices Global Conferencing and Exhibition” held in the Philippines, experts agree that this is what exactly the local outsourcing industry needs. “Experts present at the 2009 eServices Global Conferencing & Exhibition which opened today agree that the Philippines needs to speak more loudly to let the world know about the country’s capability as an outsourcing and offshoring destination”, reports InfoWorld.
With the Philippine BPO industry projected to grow by 20% to 30% this year, outsourcing firms need to explore the growth opportunities offered by the IT and financial services sector.
Author: Kim G.
Tags: offshore industry, offshore outsourcing