Numbers be damned. Yet, there is no way that you can steer clear of them. If you are already not too confused with the projections, here are some more.

By 2015, Forrester Research estimates, as many as 3.3 million US jobs and $136 billion in wages could be moved to countries such as India, China, and Russia. Meta Group predicts that offshore outsourcing will grow by more than 20 percent annually, while IDC predicts that the global ITeS market will account for revenues of $1.2 trillion by 2006. The most-quoted Gartner predicts that BPO will grow to $62 billion by 2008, accounting for 20 percent of the total market.

So What’s New?

The days of offshoring as an idea are numbered.No matter how mainstream it has become today, the fact remains that offshoring-as an idea-was mooted, marketed, and successfully executed by a set of spirited (then small) companies: TCS, Infosys, Wipro, and Satyam. They challenged the very supremacy of established leaders like IBM and EDS, and sold the idea to American corporations that IT services could be successfully executed thousands of miles away in a country that till then was known for its mysticism, yoga, poverty.... This, at a time when outsourcing as an idea was still getting mainstream. No wonder, many started taking offshoring and outsourcing as interchangeable terms. That hangover remains today. But that is a different story.

They also ended up selling India-the country where incidentally all of them had their roots. This idea would later impact the entire global economy. That is yet another story.

Taking a cue from them, a few big TNCs in America and Europe-like GE, American Express, and British Airways-started exploring the idea of replicating a similar model to deliver business services, not just IT and computer services. And they did succeed, though not as easily. They were soon joined by a few independent companies who started providing these services to clients in America and Europe, on a third-party basis. That was the BPO wave of 1999 and 2000.

As offshoring was turning from an idea to a viable model, and both captive operations of large corporations and the India-based BPO service providers were ramping up, big outsourcing companies still remained sidelined. What was worse-they were perceived second-rung. In a survey of US automotive companies in the second half of 2003, as many as 41 percent of the respondents said they would prefer an offshore-based service provider for offshoring their services as compared to only 16 percent who said they would prefer a big, US-based, broad-based, outsourcing service provider. Now, that was a little too much.

Since then, a lot has happened on ground. IBM has acquired Daksh to scale up its India operations, Convergys has reached the 10,000 people mark and so has Accenture. Today, they match any India-based company in capability as far as executing processes in India is concerned.

Yet, in market perception they remained followers, not leaders.

They realized that offshoring had become too synonymous with India and till the time it remains so, they will compete as equals-or worse still, sometimes as followers-of the India-based service providers.

It was time for rethinking. They found the answer-well, almost-in the global-delivery network (though much smaller in size), which they had built over years in different parts. That is when they tried to sell that as well. The combinations are familiar: best shore, any shore, mixed shore and what not! But it did not work out as well as they had expected. Till that time, they believed it was a marketing challenge. As their phrase-coining skills did not achieve the result they set out to, it was time to put a more holistic approach.

The result is a global delivery strategy, which most of them are now trying to put in place. And, for the first time in a decade, they seem to have an upper edge. The offshore-based providers are caught on the wrong foot. Though the IBMs and Accentures know that an Infosys or a TCS can catch up, they also know that it is going to be really tough for the latter to emerge from the shadow of their true strength, As it was for the former till now.

It is a classic role reversal. And at this point of time, it is clearly ‘advantage global majors’.

Weaving The Pieces

Contrary to popular belief, service delivery out of a location other than the served market is not a new concept for most outsourcing majors. From the Philippines to Slovakia, from the Dominican Republic to Ghana and from Guatemala to Hungary, they have been there, serving their customers in developed (and thus costlier) markets nearby. There is hardly any exception to that trend-be it a broad-based outsourcing service providers like IBM, EDS, and ACS or a customer-service major like Convergys, Sitel, or Teleperformance.