I recently decided to take a look at the impact of recession on offshore outsourcing: that the players will face pricing pressures, reduced profitability and less growth compared to the golden times, and that there will be an imperative to deliver tangible business value to customers. I looked for evidence in the quarterly results of outsourcers and, despite the absence of the predicted boom, I found that they had held on pretty well. And I decided to re-examine the results after another quarter passed.
First up, the global outsourcers. In its latest quarter, Accenture's outsourcing revenues were up seven per cent year-on-year and its outsourcing margins increased due to more work shifting offshore. Management said that they have not witnessed any change in cancellations or deferrals, and now see the period of indecision coming to an end. They also see an increased demand for BPO and application outsourcing services. The growth rate, it should be noted, is half of the previous quarter.
