Improving signs of business recovery leading to increased offshore activity in India, says Everest Market Vista Q3 report

- New captive set ups increased to an 18-month high
- One-fourth of new supplier centers were established in India

INDIA, November 05, 2009 ─ The global outsourcing and offshoring industry continued to show signs of business recovery leading to increased momentum in the Indian offshore industry during Q3 2009, according to the Market Vista: Q3 2009 report by Everest Group, a global consulting and research firm. Everest's quarterly study on global outsourcing and offshoring activity reports that the new captive set ups increased to an 18-month high in Q3 2009 compared to Q2 2009.

Comparing Q3 to Q2 in 2009, the global demand for offshore services continued its momentum on the back of improving business sentiments:

- Key verticals such as BFSI (banking, financial services, insurance) services and MDR (manufacturing, distribution, retail) contributed towards 36 percent of deal signings and retained their dominant share in total transactions
- The market activity also increased for some emerging verticals such as healthcare where the transaction volumes doubled compared to last quarter
- North America also showed some signs of recovery with doubling of transactions in the BFSI vertical from the region
- Twenty-eight new captives were established in Q3 – an 18-month high
- Offshore activity increased with 36 new supplier delivery centers established in Q3 compared to 30 during Q2
- Although there was a marginal decline of 10 percent in the reported global transaction volumes (BPO volumes decreasing by 14 percent and ITO activity reducing by 8 percent), there were signs of improvement in key geographies and verticals

The Indian offshore services industry witnessed growth amidst the signs of revival in demand:

- Eleven new captive centers were set up in India during this quarter, highest in any single geography. These included names such as Standard Chartered, Ingersoll Rand, and Kontron
- One-fourth of new supplier delivery centers were established in India
- India-centric suppliers witnessed increased transactions activity in Q3 compared to Q2
- The cost arbitrage opportunity for Indian cities improved with depreciation of the currency and reduction in operating costs. At the current momentum, the arbitrage is sustainable for about 20 years in both ITO and BPO services.

"The Indian offshore industry is growing on the back of improving demand and continued advantages of India as an offshore destination. India-centric suppliers are investing in delivery capabilities and setting up new centers," said Gaurav Gupta, Principal and Country Head-India, Everest Group.

"The increase in the number of captive set ups reflect signs of recovery in the overall market. We expect the industry in India to continue this momentum in the last quarter of 2009 as well as in 2010," said Amneet Singh, Vice President-Global Sourcing, Everest Group.

Everest's quarterly Market Vista reports provide data and analysis of deal trends in the outsourcing and offshoring market, captive landscape, current and emerging locations, key supplier developments, and key developments across the top 20 financial services companies globally. The Market Vista Q3 report also includes focus sections on output-based pricing for IT outsourcing (ITO), outsourcing destinations in Asia, and the acquisitions of ACS by Xerox and Perot Systems by Dell.

Quarterly Market Vista reports include key developments among 20 leading global suppliers. Traditional supplier profiles include Accenture, ACS, Atos Origin, Capgemini, Convergys, CSC, Hewitt, HP, IBM, Perot Systems and Unisys. Offshore-centric supplier profiles include Cognizant, EXL, Genpact, HCL, Infosys, Mahindra Satyam, Tata Consultancy Services, Wipro and WNS.

A one-hour Webinar will be held Nov. 10, 8.30 p.m. Indian Standard Time, to present study findings and insights. The 45-minute Webinar, followed by 15 minutes of questions and answers with participants, will be held Nov. 10 at 9 a.m. CDT; 10 a.m. EDT; 3 p.m. GMT Standard Time; 8:30 p.m. Indian Standard Time. To register, please visit: www.everestresearchinstitute.com/Events/Webinars.

Market Vista is a subscription service with four reports published per year. For information about the Market Vista: Q3 2009 report or other research services, please visit www.everestresearchinstitute.com, e-mail info@everestresearchinstitute.com or call +1-214-451-3110.

Source : Equity Bulls

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