Services Globalization is the New Mantra
Offshoring has evolved into a more strategic services globalization model that provides tangible benefits to global companies, neoIT, a consulting firm, said in a statement.
Jul 27, 2006
Services globalization is the new mantra that is helping organizations transform their businesses through greater efficiencies in the way they manage their outsourcing needs.
"Offshoring had a role to play in the past years because it successfully addressed an immediate need", said Satyen Hombali, managing director, neoIT India. "But the market dynamics are changing. New centres of excellence are emerging across the globe be it in Central and Eastern Europe, Latin America or Asia Pacific. Large enterprises are increasingly concerned about de-risking their offshore operations through global diversification."
Central and Eastern Europe with its skilled labour pool has emerged as a viable contender. Russia is fast emerging in IT and engineering services and countries such as Poland, Hungary and Romania are attracting captive operations of both multinationals as well as global service providers. Asia Pacific continues to draw the bulk of demand from US companies with countries such as India and the Philippines exporting billions in IT & BPO services.
The emergence of China as a viable destination promises to stimulate increased flow while Latin America is emerging as a viable nearshore destination for US companies. Mexico, Costa Rica, Brazil, Argentina and Chile are improving infrastructure, supporting domestic IT & BPO industries.
There are other emerging factors as well. Labour cost arbitrage is no longer the only compelling reason for companies to outsource their business, because the cost of labour, while still lower than in the USA, is appreciating steadily in several popular offshoring destinations. The dynamics in the customer and service provider markets are changing as well.
"All this has led to the next wave in outsourcing which is Services Globalisation," said Atul Vashistha, founder CEO, neoIT. "Clients are getting more sophisticated and focusing on governance to improve productivity and savings. Services globalization can act as the catalyst for business agility, and can enable significant operational improvements and can allow for increased growth. The competitive landscape for service providers is changing in interesting ways. New and more nimble entrants are competing for the best talent and sometimes winning. Service providers are now competing for larger and strategic deals that are no longer focused only on cost reduction. Companies that enable their clients to improve their competitive position will score bigger wins in the future".
"The future will bring unprecedented division of services labour. Global corporations will leverage centers of excellence around the world by managing them as a global portfolio to make significant gains in speed to market, ability to compete at multiple price points, flexible capacity, greater customer satisfaction and greater innovation, while still saving on cost", adds Satyen Hombali.
"Offshoring had a role to play in the past years because it successfully addressed an immediate need", said Satyen Hombali, managing director, neoIT India. "But the market dynamics are changing. New centres of excellence are emerging across the globe be it in Central and Eastern Europe, Latin America or Asia Pacific. Large enterprises are increasingly concerned about de-risking their offshore operations through global diversification."
Central and Eastern Europe with its skilled labour pool has emerged as a viable contender. Russia is fast emerging in IT and engineering services and countries such as Poland, Hungary and Romania are attracting captive operations of both multinationals as well as global service providers. Asia Pacific continues to draw the bulk of demand from US companies with countries such as India and the Philippines exporting billions in IT & BPO services.
The emergence of China as a viable destination promises to stimulate increased flow while Latin America is emerging as a viable nearshore destination for US companies. Mexico, Costa Rica, Brazil, Argentina and Chile are improving infrastructure, supporting domestic IT & BPO industries.
There are other emerging factors as well. Labour cost arbitrage is no longer the only compelling reason for companies to outsource their business, because the cost of labour, while still lower than in the USA, is appreciating steadily in several popular offshoring destinations. The dynamics in the customer and service provider markets are changing as well.
"All this has led to the next wave in outsourcing which is Services Globalisation," said Atul Vashistha, founder CEO, neoIT. "Clients are getting more sophisticated and focusing on governance to improve productivity and savings. Services globalization can act as the catalyst for business agility, and can enable significant operational improvements and can allow for increased growth. The competitive landscape for service providers is changing in interesting ways. New and more nimble entrants are competing for the best talent and sometimes winning. Service providers are now competing for larger and strategic deals that are no longer focused only on cost reduction. Companies that enable their clients to improve their competitive position will score bigger wins in the future".
"The future will bring unprecedented division of services labour. Global corporations will leverage centers of excellence around the world by managing them as a global portfolio to make significant gains in speed to market, ability to compete at multiple price points, flexible capacity, greater customer satisfaction and greater innovation, while still saving on cost", adds Satyen Hombali.