While India continues to offer a major cost advantage, thereby bagging several outsourcing opportunities, there is also a clear indication by clients to look out for alternate locations.
Even though India is definitely part of a company's growth strategy, there is an inclination to try other locations, according to leading consultancy company, A T Kearney.
Outsourcing and India: Complete Coverage
Arjun Avtar Sethi, who specialises in BPO at A T Kearney Ltd, said, "Currently, India is the preferred destination.
"However, there is a strong indication for the global delivery model to spread to other locations as well. Clients will look for locations beyond India that offer cost, as well as skill advantage. China, Asia-Pacific and some parts of Europe are some emerging locations."
On the loopholes to be plugged, Kearney believes that various gaps are already being filled. For instance, the industry has understood well by now that the only way to scale up is through bagging bigger deals.
"Companies have understood that the only way to handle pricing pressures is by taking up more work. Volumes will result in more money, which in turn can be invested to hire more people. This way companies can scale up and overcome pricing pressure."
In the quest to scale up and overcome such a hurdle, Sethi feels there will soon be some "roll-up" transactions among mid-tier companies.
"An industry with 120 companies, high volumes as well as large scale of people is unsustainable in the long run.
"We are already seeing indications of mid-tier companies that are thinking of merging. Meanwhile, it is also imperative that companies become solution-focused rather than domain-focused. Companies in India are lagging behind with respect to offering solutions across varied industry verticals. Industry-wise solution focus must increase," Sethi said.
