Global Outsourcing News

August 2008
 No. 35

Not all ‘news’ is new to CPI                       .    

Like other executives, I read business books, trade journals, research reports and general media to keep up with innovations, forecasts and trends of interest to our company. While we all can learn from best practices and thought leadership, it’s also rewarding to see marketplace confirmation of strategic foresight that was timely and accurate.

Several published reports this year described outsourcing developments that CPI had recognized and responded to much earlier. These items, for example, were not unexpected news to us:
    Phrases such as “business service outsourcing” and “global delivery model” may replace business process outsourcing and offshoring in less than a decade, says a July article in India’s leading business newspaper. “The BPO sector will be providing end-to-end business services. In fact, there may be no such word like BPO or offshoring," the president of NASSCOM is quoted as saying.
     A Business Week article last spring explored reasons why Western clients feel “added urgency” to diversify offshoring beyond India as a sole source. “How much longer the world's companies will have financial incentive to outsource to India is a matter of lively debate,” the magazine reported. It cited a 2008 Forrester Research analysis that India’s "advantage as an offshore location is fast eroding. Its attractiveness takes a hit with each passing day" because of high employee turnover, rising wages, unreliable communication and dollar depreciation against India’s rupee. 
     An earlier report by Shanghai-based BPO analysts at EquaTerra noted that “demand from domestic Chinese companies that outsource within China is expected to grow considerably.” It noted that “some Chinese banks have started outsourcing processes such as low-end data processing, information validation and reference checks” and added that regulatory changes “will spur growth in banking BPO services” for global banks entering China.    
     
As a 10-year pioneer of business service outsourcing from China, CPI was well-prepared and well-positioned to benefit from each of these directions. Of course, that doesn’t mean I’ll stop reading what others predict about our industry.  

China’s ambition soars to high-tech industry 
August 1, 2008, New York TimesNo longer content to be the home of low-skilled, low-cost, low-margin manufacturing, China is trying to move up the value chain and challenge the world’s biggest corporations for business, customers, power and recognition. Government policies favor high-tech economic zones, research and development centers and companies that promise higher salaries and more skills. More>>

Outsourcing: The dragon and the tiger
August 5, 2008, Outsourcing Opinions 

China, already an economic superpower, is poised to take a huge bite of the outsourcing industry in Asia.
Reforms in education and business policies, which include attractive packages of investor incentive and tax breaks, are giving China a hold over the global outsourcing markets as wide and solid as the Great Wall.  China’s outsourcing industry also has the world’s largest consumer population. Partnering with Chinese IT and BPO vendors lets companies tap into that market. More>>