Outsourcing Industry Witnesses Slump in Q3

Jaipur, Rajasthan -- (SBWire) -- 11/08/2011 --According to recent reports by advisory and research firm Everest, the outsourcing market is apparently going through a sluggish phase. The third quarter, spanning from July to September, recorded 472 deals being signed, as against 503 deals from the same time period a year ago. However, the Annual Contract Value (ACV) for the global transaction volumes stood at a figure of $2.7 billion, up by six percent quarter-on-quarter. The reason for this growth is being stated as the signing of few contracts that were of exponentially high monetary value.

Both IT and BPO outsourcing transaction volumes witnessed a fall of seven and twelve percent, respectively, although the ACV for IT outsourcing increased by fourteen percent, in the same period. For BPOs, however, the ACV dropped by fifty percent. There was also a drop in public sector deals, with forty-eight percent drop in ACV and thirty-one percent decrease in volume. On the other hand, the Banking, Financial Services and Insurance (BFSI) had phenomenal activity, with the Manufacturing, Distribution and Retail (MDR) verticals also registering substantial growth.

Captive units (business unit of a company that functions offshore, retaining close operational tie-ups with the parent company) also increased activity with twenty new centers in the July-September quarter, as against four new centers and nine expansions in the same time period a year ago.

In light of these recent developments, Jyoti Saini, Director – Business Development, The Global Associates, commented, “The whole world is currently reeling under a feeling of potential recession, and such a sentiment is bound to have an impact on the global outsourcing scenario.

However, the figures are still comparable to last year, which indicates that the outsourcing industry is actually doing well, with more and more companies realizing the intelligence in outsourcing processes.”