The media is hooked on the recession – it’s official. The ongoing obsession with all things downturn shows no signs of stopping, but then why would it? We’re in it and just have to hope that the brave, mega debt-inducing, spending spree many G20 governments have agreed to will one day lead to those fabled ‘green shoots’ we all await. At such a time, it would not be unreasonable to assume this article would be any different, especially with the UK budget – which now is somewhat of a misnomer – firmly on the agenda. You wouldn’t be unreasonable, but you would be wrong.
This week sourcingfocus.com has decided to focus on the more jovial stories of the week. First up then appears to be that India has outsourced its comedy entertainment. Not content with receiving western comedy on the box, the canny guys at the Comedy Store have set up shop in Mumbai. Western comedians will now grace the Indian stage and it is hoped that humor will transcend cultural boundaries – lets hope Brand and Ross stay in the UK for now. The organisers have also said that they wish to discover an Indian stand-up superstar.
In the spirit of great comedy, we thought we would begin this week’s round-up with an Indian outsourcing themed joke…
‘When President Bush was in office the US Congress decided to outsource the office of the President to India. An economist at Bangalore University is going to take over as chairman of US Council of Economic Advisers. And in a move to outsource obesity, US plans to shed three million pounds of cellulite annually!’
Well, I didn’t say it would be a good Indian outsourcing themed joke but at least it was at the expense of somewhere else – isn’t that nice?
Whilst we are still on the Indian theme, Gartner has released a survey that shows that Indian business process outsourcing (BPO) providers have proved to be stiff competition to western competitors, accounting for five percent of market revenue generated among the top 150 providers in 2008. The Round-up team suspects this to relate directly to the sterling quality of comedy now coming from the country. Gartner has other ideas, suspecting it has something to do with economic pressures. You see what I mean – obsessed!
Those clever Gartner analysts expect this increase in revenue to be maintained, with the BPO market share of Indian vendors expected to nearly double by 2010.
In 2002 there were few, if any, India-centric vendors in the top 150 worldwide providers, but by the end of 2008, the top 20 Indian BPO providers accounted for US $4 billion in revenue, representing five percent of the US $80 billion revenue of the top 150 BPO vendors. With last week’s Satyam acquisition putting a stake in the ground (we hope) on outsourcing fraud, things are looking rather rosy indeed for the Indian subcontinent.
It may be good news for India, however, TPI, the sourcing data and advisory firm, has released first-quarter market data showing a reduction in outsourcing contract size.
The TPI Index, which measures commercial contracts greater than US$25 million, showed that the 141 contracts signed during the quarter with a total contract value (TCV) of $19 billion, were down 21 percent quarter-on-quarter and 22 percent year-on-year. Annual contract value (ACV) reached nearly US$4 billion in the quarter, down 18 percent quarter-on-quarter and 27 percent year-on-year. The TCV for the first quarter of 2009 was the lowest first quarter since 2001, and the ACV was the lowest first quarter since 2003.
Fear not however, hidden hand of multi-sourcing may be at work. The first quarter index had some interesting industry sector and geographical trends. The media, retail, utilities and telecom sectors have all increased their outsourcing activity amidst the current economic downturn. Word on the grapevine is that this trend will increase as outsourcing (of certain things) becomes easier, cheaper and faster to do.
Elsewhere in the world has been relatively quiet, or sourcingfocus.com’s outsourcing radar is broken, one of the two. There was some good news in Ireland however. The once booming beacon of Europe appears to be finding a second wind in the provision of BPO.
Early in the week, the Irish Republic’s leading outsourcing firm, Abtran, announced plans for a new innovation centre. The company will invest 6 million Euros to develop the centre creating 250 in the process.
Cork-based Abtran, which specialises in support services such as sales, administration and planning, hopes to finalise the centre in 2010 and will also expand its existing facility at Bishopstown, just outside the city. We’ll have to look into where they’re getting their business though as the current state of the pound is making the country less and less attractive to UK businesses. I’m sure they’ve got it all under control!
And that neatly, if somewhat soberly, brings us to the end of another weekly news round-up. I promise there will be no more bad outsourcing jokes next week, unless you want there to be?