Outsourcing - what the future holds!

What can the outsourcing sector expect for the next decade? Undoubtedly the old corporate giants will have to start standing up to the challenges the new players in the industry have to offer.

For now though giants like EDS and IBM continue to maintain their hold over the outsourcing sector. The traditional corporate giants are undoubtedly going to have to face the upcoming IT companies that have looked to outsourcing as the key and have reaped the rewards of success. The next decade is bound to see the CRM outsourcing sector availing of benefits like:

Lower prices
Availing of the benefits of expertise
Availing of the use of better technology higher savings
Achieving higher quality
Acquiring greater investments
Acquiring more talented individuals

In terms of industry leaders lets look at who is likely to be at the forefront:

InfoSys, Tata Consultancy Services and Wipro are gaining ground in the outsourcing sector thanks to their low cost structure. Salesforce.com almost everyone 's CRM choice is opting now to focus more on the internets facilities while search engines like Google and Yahoo are endeavoring to venture into the on demand sector.

What's happening right now though to the outsourcing pioneers IBM and EDS? They seem to be standing their ground right now although the passage of time alone will tell. Their market share boasts of IBM securing almost 16 % of the global market while EDS grabbed almost 12%.

Growth Potential

For starters HP a world leader in outsourcing - had the chance of watching its revenue grow by almost 23%. Who else grew? Well statistics show that IBM also had its fair share of growth. The expected growth rate is at almost a high of 7% with the market expected to hit a high of $112.5bn in 2009. The U.S market alone is predicted to grow by almost 5 %.

Let's look at the statistics for the human resourcing market alone. The estimates reach a high of almost 80 billion by the year 2008 alone. Is this realistic? If it is it is definitely going to require a lot more additional professionals from within the sector to deal with such a vast expansion. This is one area where outsourcing is booming.

What were the overall attributes that contributed to such phenomenal growth?

Increased data centre management
Increased desktop support
Increased help desk
Increase in assisting network operations
Increase in maintenance of applications
Increase in disaster recovery
New mergers
New acquisitions

Expected Trends

Well for one thing mergers, consolidations and acquisitions are definitely going to be the name of the game. The coming decade has experts predicting that almost 40 mergers are likely to take place. What else? The coming years are sure to evidence an upsurge in the area of human resources outsourcing. Despite the fact that it is already a billion dollar industry, amounting to almost 25 billion right now it is bound to grow in leaps and bounds. The statistics indicate the fact that almost ¾ th of the U.S market is bound to transfer atleast a small part of its human resource functions to an outsourcing partner.

What does the new decade have to offer in terms of increased services to the outsourcing sector? The ultimate answer wherein one single contract will embody IT, consulting, payroll and training as well is the new offering.

The grand finale? The ultimate value of the business processing industry can reach a phenomenal high of almost 25 billion dollars by the year 2010. Astounding isn't it?

What's in the offshoot?

The Shell Group of companies is reported to have signed contracts with IBM and Wipro for outsourcing services from India. The deal is reported to be around one billion dollars. In addition to that there are billion dollar deals all set to spring up from the CRM industry.

The Downside?

The laws that have been proposed in the U.S. and the union activity that has been undertaken as an attempt to curb outsourcing have definitely had its impact on this particular sector. This particular sector is indeed witnessing difficulties ranging from recruitment problems to retention problems to the all prevailing issue of a lack of qualified professionals that are acutely needed.

Another problem is the lack of sufficient capital to fund the outsourcing activity. More often than not the project is undertaken only to be halted mid way as a result of lack of funds. Bankruptcy on account of inappropriate budgeting is the keyword. In addition the added disadvantage of "competition" is ever prevalent. From every side there are competitors springing up adding more complexities and difficulties to the outsourcing sector. Staying ahead is an uphill task and undoubtedly it is those with grit, determination and customer focus that will lead the pack.

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