Off late outsourcing has become a topic of discussion for almost every professional. People are discussing the pattern in which outsourcing market has grown over the recent years and what challenges it faces now. Many economists have even predicted a slowdown in the outsourcing market. It is believed that stiff competition, labor attrition and real estate costs in developing countries may force the companies to look for other destination to outsource the jobs or to employ native professionals. However, other market analysts believe that facilities like Cloud sourcing will merge with the outsourcing market proving better opportunities in the outsourcing business.
New Trends in the Outsourcing Industry
The economic slowdown in the countries like US will only boost outsourcing as during this period multinational companies will look to cut as much costs as possible. Obviously, outsourcing is the perfect solution for this problem. The IT leaders will have no other option to score over competitors and to keep the shareholders happy. No matter, what the state of economy will be, the projects will be outsourced. Moreover, the boom in other markets will also help the outsourcing industry in India, China, Philippines and Malaysia. Businesses in Brazil, Colombia, Peru, Costa Rica and Mexico are at a boom. This is basically a Latin American boom which will benefit the outsourcing markets. It has also been studied that service providers are keen to develop and provide multiple services to companies rather than specializing in one thing. This trend will surely be very beneficial for the outsourcing industry as companies will be able to get multiple things done by a single provider. Furthermore, the efforts of countries, mainly India and China to provide a wide range of solutions will also help. These countries are working towards developing advanced IT solutions, HR solutions, Legal services, Finance services and Engineering services. With so much in store it seems very unlikely that business wouldn’t grow after a while.
Challenges to the Outsourcing Industry
It is not that everything is working out in the favor of outsourcing business. The industry is also facing a lot of challenges which are expected to increase in the coming years. The foremost worry is that of competition. Obviously, developing countries are competing against each other for outsourced projects but the new threat that will emerge is of competition from native countries i.e. from where the job is being outsourced. The professionals in such countries are working very hard so that the jobs cannot be outsourced; they are even lowering the prices to keep up with the competition which can pose a big challenge for outsourcing industry. Moreover, labor attrition may also arise for some of the developing countries where so much work is being outsourced that there’ll be a shortage of professional in the coming years.
If the countries will be able to cope up with the challenges then there seems to be no problem in the industry for the comings years. It is believed that some new market will emerge at both ends i.e. receiver and provider. And after the initial restructuring everything will go back to normal without business or industry being affected.