European Firms not Confident of Outsourcing to India

Many European firms have found India’s offshore model inadequate for the kind of work they would like to outsource, a report by market research firm Forrester has said.

“Several European firms sent large teams to India during the past six months as a way to test the offshore waters, but we found that these initiatives lacked a solid vision and strategy for the type of work to be sent offshore, Senior Analyst with Forrester Sudin Apte said.

The report ‘Offshoring Strategies for Continental European Firms’ found that Indian providers struggle to build up meaningful local presence.

Their risk-averse approach means that they won’t make even smaller local staff acquisitions unless they see a direct and immediate increase in their European sales books, it said.

The report has also advised Indian offshore providers eyeing continental European business that they must change their risk-averse attitude and invest in building sizable local capability to win deals from European firms.

The report highlights that both Indian as well as European offshore providers have problems helping their European clients go offshore.

Source from: Economictimes.com

What Differentiates Knowledge Process Outsourcing from BPO

Financial services knowledge process outsourcing (KPO) industry is expected to be worth $5 billion by 2010, a study by KPMG said.

Sharing his views on the report, Pradeep Udhas, Global Partner-in-Charge, Sourcing Advisory, KPMG, has said that the success in offshoring business operations has encouraged many multinationals to start outsourcing key business processes and high-end knowledge work. The KPO phenomenon will have far reaching consequences for the global financial services industry over the next three years.

He feels that there is likely to be a significant shift in the boundaries between ‘outsourceable and ‘non-outsourceable activities; offshoring strategies are expected to embrace new locations and most global banks and insurers are expected to adopt KPO strategies, the study says.

Decisions about outsourcing may be accelerated to preserve and increase competitive advantage; boutique providers will leverage KPO to create new services and offerings and more rigorous regulatory and compliance control will likely be demanded as KPO providers deliver more complex services.

India is expected to remain a preferred location for KPO activity but organisations are expected to look for alternative locations for additional delivery centres, both from customer and service provider perspective.

The study also says that there are a few limitations on the potential growth of the KPO industry over the next three years like skill-set shortage, a declining U.S. dollar and compliance and regulatory pressures.

Some of the key challenges that can emerge in the industry are: maintaining high quality standards, investment in KPO infrastructure, lack of talent pool, requirement of higher level of control, confidentiality and enhanced risk management, it points out.

It says that the KPO industry has indeed come off age. Clients are recognising that process complexities, higher billing rates and skilled resources requirements differentiate KPO from BPO.

Source from: Hindu.com