New Delhi: India is the global leader in the outsourcing industry with half of the world's back office being located here. Indian outsourcing revenue at $59 billion for 2011, accounts for 51% of the global offshore market share, says a report from Tholons Research, a Bangalore based advisory firm.
The report further notes that over the past decade, developing economies such as India and the Philippines have propelled themselves to become leaders in the global outsourcing industry - making them the top two countries in terms of global offshore revenue share and employment. The total direct employment by Indian IT-BPO sector (as of 2011) was 1.98 million and indirect employment was 7.5 million.
Similarly for Philippines, where total outsourcing revenue was $11 billion in 2011, direct IT-BPO employment was 640,000 and indirect at 1.3 million. Philippines has gained a lot in recent years as lot of voice work (call center type of work) has shifted from India to Philippines.
The trend to outsource is likely to accelerate as companies seek third party firms in offshore locations to cut costs and improve performance in global large and small firms.
The figures from India's National Association of Software and Services Companies ( NASSCOM) show worldwide IT and BPO spending in 2011 reached about $574 billion and $158 billion, respectively. From a total of $732 billion only about 15% (or $110 billion) is currently outsourced by global firms to destinations like India, Philippines, China and Malaysia leaving lot of headroom for growth.
Given this potential, several developing economies - particularly in South East Asia as well as Latin America and Africa - have shown interest in actively pursuing the industry given the significant potential of its addressable market.
For instance the Malaysian government and its IT-BPO association-Outsource to Malaysia-have actively reinvented the country's marketing strategy to attract IT-BPO companies in the country when it established the Multi-media Super Corridor (MSC). Under this companies get a tax incentive for a period of 10 years, special telecom and electricity tariffs, R&D grants and so on. Time for India to scale up the game.
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