With the increasing presence of Globalization, many companies are turning to offshore outsourcing. Outsourcing increasingly has taken the shape of Business Process Outsourcing, where whole business processes (such as support and development) are outsourced. Worldwide spending on Business Process Outsourcing (BPO) services will increase to $682.5 billion in 2008, with a compound annual growth rate of 11 per cent, says a study by analyst firm IDC.
The growing backlash against BPO mirrors the public protests against the loss of jobs in manufacturing in the 1970s and 1980s – with one difference. Workers in IT and high-tech are numerically fewer but they are more powerful and have a greater visibility than the organized labor of the 1980s. Whatever the management consultants may say about the larger benefits of outsourcing to the U.S. and the U.K. economies, rising unemployment among IT workers will lead to political and social lobbying that will compel corporations to go slow on outsourcing. The sword of globalization will be fought bitterly by the IT community in the U.S. Irrespective of the logic of globalization, the favored locations for BPO cannot hope to benefit freely from the drive to relocate services.
Cross-border Business Process Outsourcing is an emerging field in which the Indian subcontinent has moved forward aggressively and is one of the leaders in the field. India, one of the leaders in the Business Process Outsourcing sector in the world today, owes a robust growth of 8% in its economy to BPO. The past few years have seen major IT companies from the United States outsourcing their work to the subcontinent. All around the world, however, countries now compete to offer BPO services to large multinational organizations.
The driver of this next stage in automation is not technology per se, but changes in competition and how businesses operate and execute their strategies. The Internet may be the agent of change, but the engine of change is a need to cut costs and improve core business processes in increasingly competitive global markets.