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Outsourcing to remain steady in 2008
By siliconindia
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Monday, 15 October 2007, 19:30 IST
New Delhi: With HR outsourcing contracts worth $1.1 billion and finance & accounting outsourcing (FAO) contracts worth $600 million to come up for renewal, outsourcing will remain strong in 2008, according to offshoring advisory firm Everest Research Institute. In its study '2008 market predictions', the firm said that demand for FAO services will continue to be strong in the coming 12-18 months, as large buyers in the exploratory phase begin to initiate actual engagements, reported Economic Times.
"On the supplier side, battle for market share will intensify. While companies such as Accenture, Genpact and IBM hold over 65 percent share, companies like Xansa, WNS, HP, Infosys and Wipro are fast emerging as notable contenders," the study revealed. The firm also expects greater location diversification among suppliers, and a shift in the nature of contracts. Transaction-based FAO engagements will evolve to judgement-intensive processes such as regulatory reporting, compliance and analysis, it said.
In 2008, captive units, niche BPO players and technology providers would be prime acquisition targets. Some captives, particularly in financial services, would see change in ownership and become third-party suppliers, the offshoring advisory firm has predicted. According to Nasscom, finance and accounting (F&A) accounts for about 40-45 percent of Indian BPO revenues. HR administration services, including payroll and benefits administration, travel and expense processing, talent acquisition and talent management services, account for about 2 percent of revenues.