Worldwide Outsourcing Industry Rebounding
Equaterra, one of the leading outsourcing advisory firms, just released its latest quarterly report on worldwide outsourcing activity, based on a survey of its advisors. From its press release:
"Despite fear of a recession in the U.S., jitters on virtually all major stock exchanges worldwide and widespread cut-backs in corporate spending, EquaTerra’s 4Q2007 Pulse surveys revealed that outsourcing demand is rebounding, with continued strong growth in EMEA (Europe, Middle East and Africa) and a substantial increase in North America. In fact, 70% of EquaTerra advisors cited increased demand levels for Information Technology (IT) and business process outsourcing in 4Q07, with demand up 19% over 3Q07, up 24% over 4Q06, and at the highest level recorded since 2Q05. Further, 59% of service providers cited new deal pipeline growth in 4Q07, and 57% expect demand to increase in 1Q08."
Reasons for the recent rebound in outsourcing demand include:
1. Increased focus on the bottom line and cost reduction (one benefit of an economic slowdown?)
2. New and growing areas like legal and knowledge process outsourcing, and document and electronic records management
3. More but smaller outsourcing deals spread across a greater number of service providers and delivered on a more global basis
Bottom Line: Today's inter-connected global economy, fueled by worldwide outsourcing, represents a fundamental shift in the way the world operates, probably in ways we haven't even fully appreciated yet. Worldwide outsourcing opportunities are increasing continually, which in many important ways serve to increase the resiliency, flexibility and strength of both the emerging economies and the advanced economies like the U.S. Isn't it possible that globalization and outsourcing help to support and insulate the U.S. economy from significant economic downturns and recession?