51) Outsourcing Demand of U.S. Slows Down

In the 3rd quarter of 2007, the total contract number of outsourcing signed was down 16%, as well as the actual number of outsourcing contracts signed decreasing, this is according to TPI --- the outsourcing adviser. The numbers of TPI show that with 50% down of the new scope from last year, American companies are limited on growing outsourcing.

On the contrary, Europe and Asia are growing in the deals of outsourcing year by year, with Europe occupying more than 50% of the deals in global market. As said by TPI, there is 36% of new scope is up in Europe and 72% in Asia Pacific. EquaTerra found that the growth of outsourcing was strong in Europe/Africa/Middle East geography.

TPI says that most Global 500 enterprises are deal of outsourcing in Europe and the U.S. (52% of leading companies in Europe and 43% of leading companies in the U.S.). Recently, the numbers of American contract agreements have been inclined.

In the first quarter in last year, the average billion-plus contract size was 9.6 billion US dollars. But it was declined to 2.4 billion US dollars in the 3rd quarter in 2007.

TPI says that the major vendors based on India increase 37%, although the overall outsourcing is slowing down in the U.S. The diversity in the worldwide outsourcing industry is exemplified by the latter, so do the expanding strength and effect of India. At the same time, the third-quarter survey of EquaTerra showed the increasing interest of India in offshoring abroad. Dollar weakness, wage inflation and changing purchaser demands are controlling the delivery centers of Central and South America, EquaTerra notes China, Central and Eastern Europe to expand.

Nelson Hall states that the market of business process outsourcing is hot; the total growth of contract value is 26% in the 3rd quarter and 54% in the first 9 months. Although TPI considered the growth of global BPO as “sluggish”, Nelson Hall and TPI both agreed that in North America, the activity of BPO contract was strongest.