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| Global recession may affect outsour |
| India and other low-cost labour markets could see growth in outsourcing services slowing down in 2008, owing to the looming global recession, a global
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| INDIA
, 22-February-2008
17:39:50 PM |
| India and other low-cost labour markets could see growth in outsourcing services slowing down in 2008, owing to the looming global recession, a global strategic advisory firm has said.
The multinational Hackett Group found that there was still significant long-term opportunity for continued business growth in India, as companies in North America, Europe and industrialized Asian markets struggle to reduce costs and drive higher effectiveness.
This they do primarily by outsourcing various areas of business to Indian and other low-cost labour markets.
''But in response to the threat of an economic downturn, many companies are hitting the pause switch on their globalisation efforts,'' said Hackett's globalisation and outsourcing practice leader Julio Ramirez.
''Interest in off-shoring is still high, and the best companies are moving forward with projects that combine globalisation with strategic process transformation,'' he added.
''During recessions, the best companies focus their efforts on rapidly driving higher efficiency in back office processes, freeing up excess working capital, and enhancing their enterprise performance management systems and processes,'' Ramirez said.
''These companies will use the economic slowdown to accelerate their outsourcing initiatives, increase the scope of existing contracts, or in the case of in-sourcing, push more work to their offshore captives.''
However, the study of prior recessions show that as the threat of a recession deepens, many companies will switch their attention to operational and financing challenges, often resorting to simplistic solutions that are not sustainable and may in fact weaken competitive positioning, he said.
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