Evalueserve has revised its Knowledge Process Outsourcing (KPO) industry forecast.
The company believes that the recent Great Recession has taken a three-year bite out of the KPO industry’s growth.
In a report in 2005, Evalueserve predicted KPO industry revenues to touch $16.7 billion by 2010-11. However, primarily due to the Great Recession, the global research and analytics firm now estimates revenues of $17 billion will not be achieved until 2013-14.
“While it may seem counterintuitive, recessionary times actually meant slower overall growth for offshoring knowledge services, since many firms were forced to shift their focus to survival mode,” says Evalueserve Chairman Dr Alok Aggarwal.
“Most major offshoring initiatives were shelved or significantly stalled during the depths of the crisis as leadership was cutting to the bone and, understandably, worrying about their own personal situations,” adds Aggarwal.
Unlike the more mature Business Process Outsourcing ( BPO) and Information Technology outsourcing (ITO) practices that have become strictly cost-saving commodities, KPO services are more complex and still evolving. ”
These services are customized, require deeper experience, skills and domain knowledge in particular sectors such as legal, technology or telecom,” says Aggarwal.
According to Aggarwal, “While cost savings are certainly a factor, many savvy firms are now viewing KPO 2.0 as a truly transformational opportunity which, when managed properly, can also provide new sources of revenue.” Aggarwal believes this bodes well for the future growth of KPO.
“Firms are more strategically evaluating the most efficient implementation of a disciplined, global research and analytics platform to also support the launch of new products and services, in fact often targeting emerging markets,” adds Aggarwal.
“Therefore, while India continues to be the largest provider of KPO, the industry has gained traction in other developing countries as offshoring combines with onshore and near-shore outsourcing in a hub-and-spoke model. Firms are now seeking the best value rather than simply focusing on the cheapest cost.”
Evalueserve predicts that the market share of the Indian KPO industry will fall to 59% of the global market by 2013-14 from over 70% four years ago.
However, with India and China producing the greatest number of talented and fresh candidates armed with KPO potential, both countries are still poised to remain the most important spokes in the knowledge services wheel.
Source:http://timesofindia.indiatimes.com/tech/news/outsourcing/Recession-sets-KPOs-back-by-3-years/articleshow/6474826.cms
