Offshore outsourcing ready for boom

Offshore outsourcing is expected to reach dizzying new heights, according to a report by analysts at Ovum.

It expects revenues will be as high as $93.4 billion in 2015, thanks to emerging superpowers like  India and China waking up to the money in the business. Ovum expects a compound annual growth rate of 5.4 percent from $71.92 billion in 2010.

Although it calls it business process outsourcing, make no mistake – it means big manufacturing contracting. The reason for the growth is thanks to the looming threat of that double-dip buzzword and the grim spectre of recession refusing to leave the building. Businesses have noticed that, in order to keep competitive, they have to lower costs at every level, and outsourcing means a lot less pressure on a company’s workforce.

Outsourcing is not just popular in manufacturing, but gaining grounds in human resources, engineering design and R&D. It’s just like ARM says – outsourcing is penned in as the way forward for companies to cut costs as well as being able to pick and choose exactly how their company is run. If a contractor doesn’t please, onto the next one.

The analyst house reckons the enterprise has found tying itself into single-vendor deals is a bit like shooting itself in the foot, and is instead spreading investments across the sectors. The small and medium sized enterprise, in particular, is driving a lot of demand because there are very scalable options available for a relatively low price.

Ovum believes there is a market, too, in North America and the UK and Ireland which will see some growth. The compound annual growth rate is a little slower but it is there, at 2.7 percent and 4.1 percent respectively. North America’s slow growth is because of how long it has been in the market, with enterprises starting their offshoring projects decades ago, Ovum says.