In a tough economic scenario, service providers will look at spreading their wings to unexplored locations and strengthening their sourcing capabilities through inorganic routes.

As the year approaches it end, there is growing anxiety on how the coming year is going to be. 2011, though marked by a sluggish pace, was an interesting year for the outsourcing industry. It was a time for some major transformations both in the IT and BPO space. We saw the focus of enterprises moving beyond cost considerations into strategic, long-term advantages. Service providers that were capable of offering this have definitely seen an edge. Experts believe that as recession fears are here to stay, the coming year is only going to be tougher.

In a tough scenario, it becomes quite obvious for players to look for new strategies to stay and survive. The choice is theirs. To do this alone or join hands to strengthen their capabilities. Expansion through inorganic routes like mergers and acquisitions is going to be a highly noticeable trend in the coming year. The recent example of Infosys BPO clearly marks the beginning.

Infosys BPO has announced the acquisition of Portland group, a provider of strategic sourcing and category management services. With this move, Infosys plans to expand its sourcing capabilities in Australia and widen its portfolio of offerings. Swaminathan D, CEO and MD, Infosys BPO, commented in its press release, "This acquisition would significantly deepen our capabilities and domain expertise in our Sourcing and Procurement practice. Further in a dynamic marketplace such as Australasia this will strengthen the top-end of our service offering in the strategic sourcing and category management functions. This will also enhance the competitiveness, spread of offerings and global reach for our clients."

The focus will be a lot on establishing a global presence and being able to serve clients from multiple locations. Newer geographies will be explored and service providers will look at spreading their wings to unexplored locations through organic or inorganic routes. Also as verticalization grows in favor, there will be an increasing demand for domain expertize.