Posted on 11/26/2005 11:42:02 PM PST by jb6
In an analysis of the top 100 outsourcing deals for 2004 just released by IDC, the research firm found a dramatic shift to more business process outsourcing (BPO), an increase in the number of players, and a reduction in total deal value. These developments reflect increased competition and expansion in the marketplace, and create pressure for traditional outsourcers to alter their business models to compete in the coming years. The value of the top 100 outsourcing deals in 2004 decreased by 1.2 percent from $69.1 billion in 2003 to $68.3 billion in 2004, according to the report. The study also found that the share of BPO and processing services deals in the top 100 outsourcing deals increased from 15.2 percent in 2003 to 25 percent in 2004, while the share of IT outsourcing services suffered a decline to 75 percent of the 2004 market. "We're starting to see a second wave of firms moving to outsourcing," says Paul Horowitz, partner, outsource advisory leader for PricewaterhouseCoopers, New York. "We expect to see the number of jobs overseas double in the next 10 years.
Recently there has been "a lot more interest" in Latin America, Malaysia, and Singapore, he adds, citing payroll, human resources, and knowledge management jobs moving offshore. "BPO is moving from hot to sizzling." The primary question from firms now isn't what to outsource, but what not to offshore, Horowitz says.
The study found that the number of players participating in the top 100 deals increased from 26 in 2003 to 34 in 2004. While just three players captured 55.6 percent of the contract value for the top 100 deals in 2003, seven were needed to reach roughly the same amount (55.9 percent) in 2004, with IBM leading the way followed by CSC, EDS, Atos Origin, HP, Accenture, and Fujitsu.
"More firms are moving more stuff overseas," Horowitz says. "I think we're just seeing the tip of the iceberg. While everyone is [outsourcing] or thinking about it, I'm surprised by how many firms that haven't done it who are name-brand firms." This is especially surprising as there's increasing pressure at shareholder meetings to outsource more positions overseas, Horowitz adds.
Geographically, the value of deals captured by Asia/Pacific based contracts, though still small, showed a jump from 0.7 percent of total deal value in 2003 to 3.9 percent in 2004, according to the report. European-based players, as determined by headquarters, increased their take of these deals from 21.7 percent in 2003 to 38.9 percent in 2004, while America's vendors saw a decrease from 76.7 percent to 56.3 percent during this same period.
he we go
More stinky jobs that Americans are unwilling to do.
It's like watching someone slit their throat in slow motion.
Bump
Really? Funny, I never see any stories about about all those 401K holders at stockholders' meeting demanding companies go offshore. Or is it just the upper echelons of the corporations, who attend those meetings, that are demanding it?
What hath globalization wrought?
Taken to its logical conclusion eventually the tax producing portions of the company will flee offshore. Unless the executives can be guaranteed security and vice in their little gated enclaves they too will depart for "offshore."
An all out war on the middle class.
Those of the "middle class" who bought into the debt is utopia nonsense will pay heavily as they are squeezed by the welfare state and the new economy. Those of us with real cash find this economy quite pleasant, for now.
The 401K laws are driving this whole phenomenon. Most accounts are purchased as shares of a mutual fund. It is these fund managers who purchase the shares in corporations and who control the voting of the shares. You have a choice: confiscatory taxation, or turn your money over to strangers who will do things like demand outsourcing.
Where have you been? American companies pay one of the highest corporate income tax rates in the world. Why the heck do you think they're fleeing in the first place?
Does it mean that the future of the 401K accounts will be at the mercy of foreign countries?
Their assets will be very secure abroad. Especially in China and India. And if not, they always will be able to ask US government and taxpayers to rescue them.
So Chicoms offer lower taxes and cheaper labor?
The scuttling of America continues. Anyone had enough yet?
In a sense, yes. It will also be at the mercy of congress, as our "live now, pay later" social welfare state goes deeper and deeper into debt. When it has collapsed, where do you think they will get the money to keep our nation from descending into chaos? They will see the 401K money pile, all of it "untaxed". They will plow into it like pigs into rotten watermelons. You will see. I've been telling everyone I know not to take the bait on the 401K scheme. Pay the taxes now and get the pain over with. If you are in your 40's like me, you have little hope of getting your 401k money back without having to pay takes rates that will make today's rates look like giveaways.
globalization is making America into a third world nation.
The capitalistic attitude that was once here is now gone. People are starting to give up and bend with the demands of the elite.
That is what globalization has brought us.
At one time we had it all. Now we're going to share. That's great news for those who had little. It's not so encouraging for those doing the giving.
Yes.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.