Offshore, Outsourcing, 2004, Ross, Research, Trends
Top 10 offshore outsourcing trends of 2004
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By Lisa Maio Ross, Ross Research (www.rossresearch.com)
Is Offshore Outsourcing Demand Going Anywhere But Up? No. Ross Research sees every indication that the demand for outsourcing offshore of business processes (BPO) and information technology (IT) functions will continue to surge in 2004, despite recent backlash.
Demand for an offshore element is not only a growing and significant piece of outsourcing client requests but also an increasingly imperative one based on inquiries we get from outsourcers, what we hear from sourcing consultants and lawyers and what we learn from buyers with whom we interact.To react to this growing demand, outsourcing service providers are working to stay ahead of the curve. Jack Benton, Vice President of Marketing for global sourcing advisory firm TPI (www.tpi.net), told Ross Research that based on his firm’s experience in 2003, roughly 40%-50% of the 50 plus transactions the firm worked on at any given time involved an offshore component. Companies will continue to make offshore demands on service providers who must be prepared to deal with them.
What to Expect in 2004
Ross Research predicts that 10 key trends will have the most significant impact on the offshore outsourcing industry during 2004 (see Table below). We discuss each of these trends in detail in a Ross Research report published January 2004 titled “Top 10 Offshore Outsourcing Trends of 2004: What They Are and How Service Providers Can Win More Business.” In the main, we: 1) provide a roadmap for outsourcers to meet these challenges head on, and 2) help current and prospective buyers of outsourcing services gain strategic intelligence about the direction of the offshore outsourcing industry and how they should expect service providers to address their demands. We are fortunate to include in the report suggestions from some of the world’s leading offshore outsourcing consultants, lawyers and industry influencers.
The following lists Ross Research’s prediction of the top 10 offshore outsourcing trends of 2004:
ROSS RESEARCH’S “TOP 10” OFFSHORE OUTSOURCING TRENDS OF 2004
1. 2004 Will Unearth An Increased Diversity of the Offshore Supplier Base, One that Will Converge.
2. The Retention of Offshore Employees Will Be More of a Challenge in 2004 Than Ever Before.
3. Offshore Outsourcing Contract Governance Will Become a Front-Burner Issue in 2004.
4. Outsourcing Contracts Will Widen in Scope, Geography and Price in 2004 As Offshore Elements Become More Global and Acceptable.
5. Offshore Outsourcing Decisions Will Be Driven By Senior-Level Client Executives More so in 2004 Than Ever Before.
6. A Significant Number of Outsourcing Contracts Will Be Renegotiated During 2004 Due to the Effects of Offshore Outsourcing.
7. Lawyers, Consultants and Other Outsourcing Intermediaries Will Broaden Their Offerings in 2004 and Become More Relevant and Involved in the Offshore Outsourcing Process.
8. Ross Research expects a growing backlash against offshore outsourcing during 2004, one that will not abate for some time.
9. Business process outsourcing (BPO) will take place in offshore locations during 2004 more than in the past.
10. The number of countries providing offshore outsourcing services will rise substantially in 2004.
Source: Ross Research, 2004
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