Outsourcing Clients Seeking To Work With Nearshore, Specialized Vendors Post-recession

Indian outsourcing giants, Infosys, TCS and Wipro are caving in to nearshore competitors

, according to recent news reports. Some of these rivals include Softtek of Mexico, Ness Technologies headquartered in Israel, and Brazil-based CPM Braxis.

Top outsourcing clients such as Citibank, GEO among others are looking to work with nearshore, specialized vendors rather than shipping projects offshore to faraway destinations like India. A report by the Times of India said that these emerging outsourcing destinations appear more attractive to major customers.

To keep this trend at bay, the big tech firms in India including Infosys, TCS, and Wipro, are expanding and adding staff in emerging destinations like Eastern Europe, Asia and Latin America. Analysts say a recovery is in the offing, and outsourcing firms are expecting increased growth in the industry. The expansion to these regions is an attempt to capture market share amid stiff competition.

Research director of Everest Group, an outsourcing consulting firm, Jimit Arora said in a statement, "Some customers having 70-80 per cent of their offshore resources in India are realising that they need to look at the third category of suppliers that are local and niche," reports SourcingFocus.com.

Suresh Vaswani, a top official at Wipro announced that the outsourcing firm is looking to expand into niche markets like China and Europe. Incidentally, China is another market that is opening up to outsourcing. With its large population, China has the manpower to compete with Indian rivals in terms of cheap labor.

The move by Wipro to establish a foothold in China is seen by analysts as a means to increase its business in Japan as well. Additionally, Wipro"s revenue is growing in Middle East and Latin America "" two hotspots for outsourcing.

Despite the economic slowdown, both nearshore and offshore outsourcing firms are getting ready for the new wave in outsourcing. This trend is likely to increase growth in the industry and shift the dominance from India to some of the other emerging regions that facilitate cost savings and efficiency.

by: jakewriter

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