Offshore Locations: Buyers’ Perceptions and Plans for 2011-2012

As the global economy recovers from the recession of 2009, the global sourcing market is witnessing an increase in activity. Companies are expanding offshore operations through both captive and third-party models. Further, the geographic spread of offshoring is expanding with new locations emerging across Asia, Central America, and Eastern Europe.

To gain further insight into these trends, Everest conducted a market survey during January-February 2010. The survey focused on understanding the current location footprint, expansion plans, and perceptions of risk in offshore locations. In this whitepaper, we present a summary of how buyers are thinking about their expansion plans, specifically with respect to scale and locations. We also explore typical location risk perceptions of buyer organizations.

Key takeaways:

Most buyers plan to expand offshoring and a significant proportion plan to expand offshoring aggressively. Approximately 75 percent of small and medium adopters and 90 percent of large adopters plan to expand their offshore scale by more than 500 FTEs over the next two years.

India is the dominant location and more than 75 percent of respondents currently leveraging India. As buyers grow offshore scale, they are increasingly building multi-location portfolios.

India will continue to be an important anchor for global portfolios with more than 70 percent of buyers planning to expand in India. For those who plan to expand in their “anchor” activity within India, Philippines and China are the most prominent locations for their global portfolio expansion. Malaysia, Brazil, and Mexico are other locations that buyers plan to grow within their global portfolio.

Exhibit: Growth plans across organization segments

The full whitepaper is complimentary for Market Vista subscribers and is also available for purchase.

To access the full 9-page whitepaper, please CLICK HERE.

New additions to Market Vista

Market Vista has been expanded and now includes:

• Quarterly Market Vista reports providing details of trends in transactions, captives, locations and suppliers
• Six Global Location Insights e-newsletters
• Global Locations Database providing key data for 23 leading offshore destinations
• Up to six Breaking Viewpoint research briefings summarizing the impact and implications of key trends in global sourcing
• Four Market Vista Primer reports outlining perspectives on emerging market dynamics e.g., output-based pricing, F&A market characteristics

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Research

Other new research documents include:

• Market Vista Q1 2010 Primer: Overview of Key Latin American Contact Center Suppliers
• Global Locations Database – Standard Edition

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Webinars

July 08, 2010 – Cut Your SG&A Costs by 30% or more by Building the Right Service Delivery Model

To view a listing of webinars, register for future webinars, and listen to previously recorded webinars, please click here.

Industry news

• HCL Technologies set up its first center in Brazil in Rio Grande do Sul in June. The center employs 150 employees and provides multilingual helpdesk support to HCL customers across Latin America and Europe
• Atos Origin IT services announced in May that it plans to develop an IT processes support center in Bydgoszcz, Poland. The center is expected to generate 250 positions for BPO specialists
• FirstSource Solutions plans to expand its presence in Northern Ireland by setting up a contact center in Middlesbrough. The center will create 500 positions
• ANZ Banking will inaugurate its back-office operations in Manila, Philippines in July this year. It plans to employ 300 people by the end of the year to support its Asian operations
• Aegis strengthened its presence in the United States by acquiring Sallie Mae’s customer service center in Killeen, United States in May this year. It would be the company’s 10th center in the United States and will add 350 employees to the company
• GlobalLogic recently completed the acquisition of Global Graphics Software’s India captive. The facility in Pune, India will now provide GlobalLogic with product development and quality assurance services apart from providing HR, IT, finance and operational processes
• Infor set up a Center of Excellence in Hyderabad, India in April to develop components for business software solutions and provide data migration services. Infor also plans to shift some of its European and United States back-office operations to the center. It currently employs 550 employees in the center and plans to add another 150 within six months

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