Tuesday, October 23, 2007

U.S. Outsourcing Market Remains Sluggish in Q3

Source: itbusinessedge.com

Echoing its findings from earlier this year, outsourcing advisory firm TPI says that outsourcing business is sluggish in the U.S. in the third quarter, but looking quite lively in Europe and Asia.

While U.S. members of the Global 500 are nearly as likely as their European counterparts to sign outsourcing contracts (43 percent vs. 52 percent), new scope is down 50 percent in the U.S. from the same period last year. In contrast, it’s up 36 percent in Europe and 72 percent in Asia-Pacific, reports PCWorld.com.
Despite the slowdown in U.S. demand for outsourcing, big Indian outsourcing firms tallied a 37 percent increase in U.S. customer revenues. Still, companies like Tata Consultancy Services are making an effort to broaden their customer base beyond the U.S.

TPI did have a somewhat different take on the BPO market in its latest index. Though TPI characterized it as slow in both quarters — calling it “tepid and lumpy” in Q2 and “sluggish” in Q3 — it agreed with analyst firm Nelson Hall that North America showed the strongest activity in Q3. Earlier this year, however, TPI said Asia-Pac was the only region where BPI business grew.