Tag: India

Looking Back at Our Decade-Old Predictions: What We Got Right … and Wrong | In the News

A decade ago, Everest Group made some predictions about the India global services industry; recently we cracked open the time capsule to check out our predictive capabilities. We found that we got some things right, some things wrong, and some things very wrong. The outcome of our recent analysis, though, is a huge boost in confidence for the prospering India global services industry.

Read more in Intelligent Sourcing

How Donald Trump May Save the India-heritage Outsourcing Firms | Sherpas in Blue Shirts

Over the past month or so, many of the India-heritage outsourcing firms have reacted to the current political climate to announce significant hiring goals for onshore (U.S.) hiring while scaling back applications for H-1B visas. There are numerous reports across the country of these announcements creating a frenzy of governors courting the companies to locate delivery centers in their states, with sweet incentives included.

Impact of the digital model

Notwithstanding the irony of taxpayers underwriting job growth for the same companies that are simultaneously being raked across the coals for stealing American jobs and moving them to India and other offshore locations, the shifts coming on the back of political jawboning may be setting the stage for a way to a longer-term turnaround of prosperity. Recent analysis of the organic growth of the top 20 outsourcing services providers by Everest Group and DeepDive shows a dramatic deceleration of these collective firms’ growth. Projections over the next couple of years indicate a continuation of this trend. Deeper in the numbers, however, is the startling fact that the 80 percent block of these firms’ revenue that is labor arbitrage-based is actually shrinking slightly! The remaining 20 percent – that which is generally considered “digital” (cloud, mobile, social, analytics, AI/robotics, etc.) is growing at an annual rate of over 20 percent.

Many of these “digital” activities require service delivery resources that are intimate with the consumers of the service. This is driving a push for a greater onsite (onshore) delivery mix to unlock the value inherent in these digital initiatives.

Now you see the punch line – Trump-driven reactions to increase the onshore presence aligns with what is required for success in the digital marketplace.

The digital transformation challenge

However, it is not a forgone conclusion that all the firms that shift their mix slightly will succeed in this fast-growing digital space. Digital success often requires a different business model that demands changes far beyond the location of service delivery staff. We see all elements of the business model shifting – locations, talent approach, innovation cycle, sales motions, organization models, funding processes, etc. – a transformation that is challenging for companies large and small (enterprises seeking to adopt digital solutions also have major transformational change requirements).

That said, actions in response to the U.S. administration’s stricter posture toward immigration, commitments to “hire American” and “buy American,” and rhetoric about trade reform (i.e., border taxes could position, if not encourage, service providers to increase their digital mix. The market revenue numbers suggest that customers want it, so those offshore-centric players who can navigate the business model changes required to do it at scale could end up thanking President Trump for the push into the digital pool.

Outsourcing firms thrown into digital model

BPO Industry Challenged: Outsourcing Giant India Losing to China, Small Countries | In the News

“For voice work, the Philippines has a better voice/accent environment even though it is at a cost disadvantage to India. For some kinds of work, close proximity and time zones advantage near shore locations is preferred over India,” said Peter Bendor Samuel, CEO of Everest Group, a Dallas-headquartered management consulting and research services firm.

Citing concentration risk as another reason, Samuel said some firms feel that they are overly concentrated in India creating increased risk in the event of natural disasters or large currency swings for these firms a more geographically dispersed location strategy makes sense.

“Although these alternate locations have taken some share from India such as Mexico, Costa Rica and for Europe, Poland, we believe that these share gains will level off as these alternative locations are priced higher than the low cost high skilled Indian labour pool,” Samuel said.

Read more at the Hindustan Times

India’s $150 Billion Outsourcing Industry Stares at an Uncertain Future | In the News

“The proposed visa and immigration legislation … will raise the cost to operate by raising the cost of the Indian firms’ landed or onshore costs,” says Peter Bendor-Samuel, CEO of offshoring advisory Everest Group. “Given the hyper-competitive pricing environment, it seems increasingly unlikely that they will be able to pass along the cost to their clients, putting increased pressures on margins.”

Read more at Economic Times

Have a question?

Please let us know how we can help you.

Contact us

Email us

How can we engage?

Please let us know how we can help you on your journey.