Sunday, February 25, 2007

Services Globalization Trends for 2007

Services globalization is now a key strategic imperative for successful enterprises and will be the single most important factor shaping how services are developed and delivered across the globe. The success of services globalization in the future will be determined by the quality of of delivery and supply. To this end, the future leaders in services globalization will stand on the following five tenets: Investment, Leveraging, Countries/Cities of Excellence, Scale and Quality of People, Process Excellence and Services Intellectual Property.

Key Trends that will shape Services Globalization in 2007:

1. Small and Medium Enterprises, driven by Private Equity Investors, will become significant participants in services globalization.
2. Firms will adopt the Cities of Excellence model, sourcing services from the best location for respective ITO/BPO domains/ processes.
3. Multi-Sourcing will dominate, as mega-deals will be sourced to a mix of Tier 1 and Tier II service providers.
4. ITO/BPO growth will be supply-constrained in an extremely strong demand market.
5. Globally, service providers will witness a significant resource crunch.
6. Engineering Services, R&D Services, ERP, Infrastructure Management, Product Development and Healthcare will see increased traction in 2007.
7. Captives will see heightened activity in 2007, with parent companies considering spin-offs to cash out
8. Offshoring of customer-facing processes will slow down, and some may even move back onshore/ nearshore
9. Tier II and Tier III service providers will spread their global footprint by making significant overseas acquisitionsIndia will continue to be the leading destination for ITO/BPO.

10. India will continue to be the eading destination of for IT/BPO. The Philippines will come in a distant second, and China will trail behind for next several years.

Avinash Vashistha,
Chairman and CEO


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