The Hindu Business Line : Expert sees firm trend in outsourcing growth

THE largest growth in offshoring will happen in human resources management and customer relationship management processes and the BPO sector is set to reap the benefits of this boom, according to outsourcing expert Mr Michael F. Corbett.

"In 12-18 months, at least 34 per cent of corporate IT budgets will be outsourced. While at least 45 per cent of companies expect to outsource for cost considerations, a significant 17 per cent of them will be outsourcing to enable them to focus on core competencies," Mr Corbett revealed the results of a survey by his consulting firm, Michael F. Corbett & Associates. Mr Corbett was speaking at the India Outsourcing Summit, hosted by the Software Technology Parks of India (STPI) here on Wednesday.

Mr Corbett said the anti-outsourcing legislation in the US was still a knee-jerk reaction. He said business managers were aware of the benefits of outsourcing and the trend would continue.

Surveys by Mr Corbett's firm revealed a real concern about how organisations would like to take the offshoring decision forward. Companies were more concerned about and aware of employee and public relations issues in the matter, he said.

Mr B.V. Naidu, Director, STPI, said the Government was promoting secondary cities as centres for sustaining a healthy growth in call centres and BPOs, while also focussing on administering the BPO skills assessment test, developing disaster recovery and business continuity processes at the infrastructural level.

Mr Vikash Daga, Consultant, McKinsey and Co, said the scorching pace and reckless outsourcing so far would transform to a more mature ad healthy growth in offshoring of IT and ITES. BPO service providers must focus on transitioning from a mere replication mode to offering value addition - either through platform-based inputs or process reengineering-led services by bundling infrastructure, IT and BPO services.

"Indian companies must make the move to these end-state modes," Mr Daga said. Sophisticated customers will increasingly decide how much to outsource, what processes to outsource and under what terms, Mr Daga said.