Monday, January 08, 2007

Technology outsourcing in 2007

A research report suggests business transformation to accelerate technology outsourcing in 2007. It also finds India to be the favorite top destination for IT Services.

NeoIT, a California-based consulting firm, predicts the services globalization industry to continue to grow at a brisk rate of 25-30 percent in the coming year. This owes to the fact that more and more companies will look for services globalization initiatives.

Atul Vashistha, NeoIT CEO says, "Business transformation through services globalization is one of the most important levers that global companies can no longer afford to ignore."

India will continue to be the top destination for IT services, but buyers will look for cities of excellence in other countries, too, where they can leverage employee skills.

This is according to the research, which echoes the predictions of Tholons, a Washington DC-based investment advisory and management firm, when it released its report last month.

Both firms predict that M&A activity will increase this year, with outsourcing services companies buying consulting firms or those firms that have local knowledge in the countries where their customers reside.

The trends in 2007 will see companies from developed countries buying firms in countries like India, the Philippines and Russia to gain access to lower-cost talent, forecasts the consulting firms.

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