Contrary to what some naysayers of outsourcing are saying, the industry is alive and well, and it seems that it’s going to stay for a long while yet. As mentioned in a previous article, competition in outsourcing is becoming very stiff now, what with the industry expanding, as is what professional services firm Pricewaterhouse Coopers surmised in its Jan, 2010 report. Everyone wants a piece of the cake, but when everyone’s toting the same salver, it’s a bit difficult to decide to whom to give a piece to.

Last December, I wrote an article on Infosys’ (NASDAQ:INFY) big week, wherein the outsourcing company scored numerous deals and expanded its business in multiple areas around the world. However, since ringing in the New Year, it seems that, at least for now, the company has lost a little bit of its steam, and acquisition of contracts have waned.

Tallying the headlines from December 13-19, the most featured company in outsourcing news was Infosys (NasdaqGS: INFY).  The company has appeared back to back in news bits and clips all over the world and it seems like the company is revving up their strategies for the coming new year.

With the United States market still in slump, businesses project difficulties in profit increase in the next 7 years. Job cuts continue in the US and the rate of job creation of 25 per year is not sufficient to offset job losses in the next 5 years. On the other side of the world, Indian outsourcing firms show an opposite trend. Global IT service providers such as Infosys which provides technical consulting, design and development of business solutions have been aggressively increasing their workforce. Last week, the company reported that in the second quarter it has hired 6,069 people offsetting the 4,521 employees it laid off in the same quarter. Tata Consultancy Service is also bullishly hiring with plans of hiring 25,000 people worldwide for this year 2009 and 90% coming from India. Also part of the bandwagon is Wipro Technologies. In October 15 Wipro CEO Azim Premji said that the company is planning to hire about 500 local employees for a new service centre by Jun 2010. Manpower India Director Cherian Kuruvila also highlighted this hiring trend by Indian outsourcing firms saying, “Companies are expected to build a talent pool for upcoming projects as green shoots are visible”.

India has long been the dominant country when it comes to Business Process Outsourcing (BPO), however, times have changed.  The National Outsourcing Association (NOA) published a report titled “Best Practice Outsourcing and Offshoring” which pointed the issue Indian offshore providers face –increasing operational costs forcing some providers to relocate their centers to cheaper areas in India in order to compete more effectively, although this move has not hindered a recent surge in emerging outsourcing destinations. “Despite recent optimistic predictions from the NASSCOM conference, India is experiencing the effects of a global slowdown and a reduction in IT spending.  Costs for Indian vendors are also on the up.” –NOA report. Indian BPO providers may not be the only ones experiencing increasing operational costs, other offshore providers experience this as well but at a lesser extent as countries such as the Philippines receive strong government support.

Outsourcing has come through a lot of changes since its inception. Its evolution depends on a number of factors like how the market reacts, government intervention, partnerships, and geographical positioning to name a few. The industry adapts to changes in the business environment which is crucial to its survival.

Switzerland-based financial services provider UBS (NYSE: UBS) is reportedly selling its business process outsourcing (BPO) and knowledge process outsourcing (KPO) units. And is said to be in talks with Indian offshoring giants Infosys Technologies Limited (NASDAQ: INFY) and Wipro Limited (NYSE: WIT). The UBS Indian Service Center and UBS Krakow centre has an estimated value of $200 million, reports The Economic Times.