Outsourcing 2008

It's been a mixed year for the outsourcing sector. The volatility in the currency values (weakening dollar value) has been quite demonstrable in the passing year. In this backdrop, all eyes are on 2008. And there seems to be no consensus on what's in store. A NeoIT report says that the U.S economic slowdown will increase the demand for outsourced services in 2008 as Fortune 1000 companies seek to reduce costs. Software and IT services are tipped to lead the growth. However, another report by Forrester predicts that IT spending will take a dip in 2008. Other segments of the outsourcing market, notably HR outsourcing and F&A outsourcing are in for an upswing. According to Everest Research Institute, HRO contracts worth USD 1.1 billion and FAO contracts worth USD 600 million are up for renewal in 2008. Similarly, remote infrastructure outsourcing will register a growth of over 60 percent in the coming year. 2008 also promises to give its clients more options in awarding its plum projects. Traditional powerhouses like India and China now are at threat from Canada, Brazil, Chile, Mexico, The Philippines, South Africa, amongst others. With the USD showing no signs of stabilizing, service providers may turn towards Europe, especially the European financial services and banking sector. Some other interesting predictions for 2008 are lesser mega-deals, shorter contract duration and increasing popularity of the nearshoring model.