Sunny Outlook for Business Process Outsourcing

Includes: C, SRT, VTIV
by: Outsourcing Insider


The downpour isn’t a torrent anymore …

The world is still recovering from the effects of the global economic crisis. And while it may be years until everybody’s able to go back to pre-crisis form, most industries, including the outsourcing industry, now have a sunny outlook for the future.

In the country we saw a slowdown in the BPO industry which only gained strength during the last part of 2008 and the first half of 2009, before finally kicking off during the second half of the year in anticipation of a full blown recovery. Last year’s revenue grew by 19% and is expected to have increased growth in sales this 2010.

Construction of real estate has also started moving again this year as developers have become increasingly optimistic. Most projects for buildings and offices that were delayed due to financial constraints and cautious decision-making on the parts of the developers are now being revived once again. These projects could open potential office spaces for more outsourcing firms and could lead to further expansion of established companies within the country.

Various companies have already started with their expansions tapping into the RP labor pool. Among these companies are StarTek (NYSE: SRT), Australian BPO firm Salmat (ASX: SLM) and Citigroup (NYSE: C). But the expansions are not only limited to the RP. PricewaterhouseCoopers anticipates more expansions for the global outsourcing market, taking into account potential players that could become valuable outsourcing investments.

… but it isn’t sunny just yet.

Although there seems to be the growing trend of expansions and recoveries, there is still caution all around when it comes to business decisions and spending. As one article puts it, ‘The pressure to reduce costs will remain in 2010’. Businesses have begun to implement more stringent measures for monitoring their operations, seeking ways of saving while maximizing the potential of available resources. While being relatively cheaper, companies are trying to streamline costs to make for a more attractive option to costumers on a very tight budget. It forced the drive to achieve increased efficiency, effectiveness and innovation such as inVentiv’s (NASDAQ: VTIV) new model for outsourcing sales. Setting yourself in the upswing of recovery could help you put a firm foot on the global field as regions would be trying to vie for those potential customers. Now more than ever innovation for your business would be important. As I see it, costs, pitch and quality of work would be the deciding factors in trying to get a hold of the lion’s share of the profits.

All in all there was a lesson learned with the crisis, at the end of the day I guess they could say, “We got lost, but we found a better route; and better bring an umbrella just in case.”

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