Asian business process outsourcing market reached $6 bln in 2005

IDC predicts moderate growth for the region from 2006 to 2010 since much of APEJ will remain at the developmental stages of BPO adoption during this period. Over the past 12 months, companies such as Accenture, EDS, HP and IBM have opened massive BPO centers in PRC, India and the Philippines, largely for servicing the United States and Europe, and not APEJ. BPO in 2005 totaled $6 bln and this figure is forecast to rise to about $14 bln by 2010 at a compound annual growth rate (CAGR) of approximately 18%.

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Outsourcing saves 15% on average

Outsourcing of IT and business services delivers average cost savings of 15%, disproving claims that outsourcing can reduce costs by over 60%. After professional fees, severance pay and governance costs, savings range between 10% and 39%, with the average level at 15% when contracts are first let, according to TPI. Q1 2006 had the largest number of outsourcing contracts ever signed in a Q1. TPI found that 83 contracts were signed, valued globally at $21.9 bln.

Outsourcing industry generated $23.4 bln for India

India’s $23.4 bln outsourcing industry accounts for most of the country’s software and services industry, which makes up nearly 5% of GDP. The industry employs 1.2 mln workers, has sparked a consumer revolution in India, and is accelerating at more than 30% a year. India produces 3 mln college graduates every year, including nearly 400,000 engineers.

Business outsourcing market up 33% in 2005

According to IDC, the business outsourcing market progressed positively in 2005, experiencing a 33% increase in the volume of deals signed. IDC finds market adoption expanding and becoming more mainstream, as large, midsize, and small companies from a variety of industries embrace the business outsourcing model.

29K legal jobs to migrate to India by 2008

Though India had earned over $6.7 bln in US-based outsourcing services such as software and call centres till march 2005, the field of legal outsourcing was largely untapped, says Forrester Research. Legal field is poised to increase dramatically from about $80 mln annually to approximately $4 bln, with jobs growing to 29,000 in 2008, 35,000 by 2010, and 79,000 by 2015. At present the number of jobs in legal outsourcing in India stood less than 12,000.

US outsourcing market to grow 4.2% in 2005

Top three IT outsourcing firms in the world (IBM, EDS, and CSC) kept their top spots. Based on 2004 revenue, IBM occupied the top spot with 15.5% of the global market in 2004, while EDS ranked number two with 11.7%, according to IDC. CDC’s share was 5.5%. The global market for outsourcing services in 2004 hit $84.6 bln. IDC expects the market to grow nearly 6% annually through the end of the decade, reaching $112.5 bln in 2009. The $33.8 bln US market will grow at 4.2%.

Value of top 100 outsourcing deals down 1.2% in 2004

The value of the top 100 outsourcing deals in 2004 decreased by 1.2% from $69.1 bln in 2003 to $68.3 bln in 2004. However, qualifying for the top 100 in 2004 required a minimum deal value of $184 mln, a 5.1% increase from 2003. The share of BPO and processing services deals in the top 100 outsourcing deals increased from 15.2% in 2003 to 25% in 2004, while the share of IT outsourcing services suffered a decline to 75% of the 2004 market, IDC says

Global outsourcing to create 337,625 US jobs by 2010

Information Technology Association of America says global outsourcing generated a net increase of US jobs in 2005 of 257,042, and is expected to create a net number of 337,625 new jobs by 2010. ITAA says US economy benefits from global outsourcing because they help increase the US Gross Domestic Product by $68.7 mln in 2005. By 2010, outsourcing will increase GDP by $147.4 mln.

Value of outsourcing contracts down 10-15% in 2005

The value of outsourcing contracts has dropped by 10-15% for 2005, according to TPI. Contract value is likely to drop to between $60-65 bln from its $72 bln average in recent years. Q3 2005 saw a record gain of 11% in the total number of outsourcing contracts signed and the number of contracts signed in 2005 so far is 191, compared to 172 signed by this point in 2004.

Global PC shipments up 17% in Q3 2005

Worldwide PC shipments increased by more than 17% in Q3 2005 despite rising interest rates and oil prices, according to IDC. International markets continued to grow quickly, but even US shipments grew by 11% YTY. The latest data show total worldwide PC shipments increasing by 17.1% YTY versus an August forecast of 13.3%.

US IT offshoring to double to $14.7 bln by 2009

The US offshore IT services market is expected to nearly double in size to an estimated $14.7 bln by 2009, reports IDC. This represents a five-year compound annual growth rate (CAGR) of 14.4%. Discrete manufacturers will continue to generate the largest percentage of overall revenue for offshore services providers, accounting for 17% of spending by 2009. Retail, communications, banking, insurance, and other financial services companies are also expected to be prominent users of offshore IT services. In aggregate, the financial services industry is expected to account for 28.9% of the total spend by the end of the forecast period.