Top 10 Outsourcing Trends in 2010Posted January 03, 2010
According to the International Association of Outsourcing Professionals, companies will return to using outsourcing to recapture innovation and provide flexibility in 2010 versus simply saving money, but global economic uncertainty will continue to impact the industry.
The top 10 trends to watch for in 2010 are:
1. Delayed Deals Get the Green Light
The economic downturn over the past 12 to 18 months put many outsourcing deals on hold. Companies are now forging ahead with renewed confidence in the stability and growth of economic markets.
2. Desperately Seeking Value
The tremendous pricing pressure on outsourcing deals renegotiated in 2008-09 will lead some companies to realize that deep pricing cuts have damaged relationships and the business value that outsourcing brings. Providers and customers will re-negotiate contracts more collaboratively to regain innovation and flexibility, and enhance total value.
3. Flexibility to Get Out of Contracts
With uncertainty still surrounding the economy, companies will hesitate to make long-term commitments with outsourcing service providers because of the fear of the unknown.
4. Uncertainty Leads to Consolidation
Global economic uncertainty, currency fluctuations and other market forces will encourage increasing levels of mergers and acquisitions on a global basis, particularly among service providers.
5. Outsourcing Hiring Return
Expect to see growth in new graduate hiring in emerging outsourcing locations as well as wage increases of 8 to 10 percent in India and many other Asia Pacific locations, while the U.S and Western Europe will see much smaller raises.
6. New Outsourcing Destinations Emerge
Rising geographies in Central and South America will take market share away from traditional outsourcing locations, such as China.
7. New Destinations Differentiate Themselves
As new destinations emerge, the competition among outsourcing providers will intensify, leading parts of the world, particularly the BRIC nations, to differentiate themselves through professional certification, such as the COP designation, and training and education programs.
8. Tooling Up with Technology
Companies will increasingly make use of advanced management practices, tools and technologies such as ORM and cloud computing, to provide improved value and operational flexibility and performance.
9. Social Responsibility
Outsourcing practices will continue to be impacted by increased environmental awareness and social responsibility. The industry will be called on to step-up its role as a leader in corporate social responsibility globally.
10. Political Shifts
Increased government regulations and the resulting need for compliance will affect outsourcing in the coming year.
(30 December 2009, www.outsourcingprofessional.org)