The Outsourcing Week in Review (International): July 24, 2023

Welcome to Inside Outsourcing: The Outsourcing Week in Review

THE WEEK IN REVIEW

We’re tracking everything in outsourcing, as it redefines the global economy – so you don’t have to. Sit back, and ease into your Monday with Inside Outsourcing: International Edition! 

An impressive surge in mega-deals propelled the global managed services market to a record $10 billion in Q2 2023. Ten such mega-deals accounted for US$1.7 billion of annual contract value (ACV) — a substantial 35% increase from the same quarter in the previous year. According to research and advisory firm Information Services Group (ISG), this spike in mega-deals came despite a decrease in cloud services expenditure. Enterprise demand for cost optimization was a strong contributing factor, leading to robust contract renewals and extensions. Despite this success, ISG President Steve Hall cautioned against overconfidence, warning that market growth might slow as companies exercise caution over their investments for the rest of the year.

In the Pacific, the Fijian Government recently made a landmark commitment of $2.5 million to fortify its local outsourcing industry, which is big money considering its population of only 900,000. Trade Minister Manoa Kamikamica outlined the Government’s intent to develop incentives targeting Business Process Outsourcing (BPO), Knowledge Process Outsourcing (KPO), and shared services to bolster the industry. The ultimate aim, explained Kamikamica, is to position Fiji as a regional powerhouse, attracting high-profile international brands to the country. Simultaneously, Outsource Fiji is working with Learning Planet to launch an online scholarship program to advance professional development within the BPO sector. The open-source learning platform will feature nine key modules: communication, customer skills, leadership, and mental health improvement. So far, 315 BPO sector employees have registered, and 100 scholarships are available for jobless individuals holding a Year 12 qualification.

Despite recent layoffs in major tech companies, India‘s IT and Business Process Outsourcing (BPO) sectors witnessed a resurgence in hiring in June 2023. The BPO industry registered a 7% in hiring, while the IT sector reported a 2% increase in recruitment. Experts said this promising recovery hints at a robust rebound in hiring trends and highlights the sectors’ resilience.

Meanwhile, Indian IT giants Tata Consultancy Services (TCS) and Wipro Limited also demonstrated strong performances for the June quarter. TCS reported a robust 16.8% year-on-year (YoY) net income growth in Q1 of 2023, backed by operational improvements, transformational engagements, and a continued focus on investment and talent development. Similarly, Wipro displayed a healthy 12% YoY growth in net income for the same period, highlighting the significance of strategic initiatives like the launch of Wipro ai360 and a US$1 billion AI investment.

In Southeast Asia, Asia CEO Awards Chairman Richard Mills said that the Philippines is on the brink of a “golden age of growth” thanks to its outsourcing industry. Citing the country’s young, English-proficient workforce, Mills predicted that the Philippines would thrive in a post-pandemic world favoring remote and hybrid work models. However, Mills also called for bureaucratic reforms to help the country combat challenges like talent shortages in manufacturing and unlock its full economic potential.

At the same time, the Nigerian Export Promotion Council (NEPC) is looking to generate around US$5 billion in revenue from the outsourcing sector by 2024. Highlighting Nigeria‘s appeal as an outsourcing hub due to its high population, low labor costs, and English proficiency, NEPC Executive Director Ezra Yakusak said the sector could significantly boost the country’s economy. Still, the country’s Ministry of Industry, Trade, and Investments Permanent Secretary Evelyn Ngige emphasized the need for a conducive business environment, streamlined bureaucratic processes, and attractive investor incentives to support the sector’s growth in the next few years.

Despite this promising news, the outsourcing industry also grapples with ethical concerns. Deloitte Australia CEO Adam Powick admitted to feeling “incredibly privileged” to receive an annual pay of US$2.3 million from the company. During an ongoing investigation into the consulting firm’s pay structures and ethical practices, Powick stated that he feels undeserving of the salary — which is 7x the Australian Prime Minister’s annual salary. The probe also revealed that Deloitte AU received around 121 complaints regarding bullying, sexual harassment, discrimination, and mishandling of confidential information just this year. This ongoing investigation underlines the mounting scrutiny for consulting firms regarding their ethical standards and the importance of transparency and equity in remuneration practices.

In other news, a consortium of Ethiopian tech companies recently created the Ethiopian Outsourcing Association (EOA) to position the nation as a competitive outsourcing hub. The EOA aims to bring policy changes, promote innovation and growth, and showcase Ethiopia’s blossoming tech sector. The move is part of the broader trend of Africa’s increased appeal as an outsourcing destination, with recent investments from tech giants like Amazon, Google, and Microsoft boosting job growth in tech-enabled sectors.

Finally, in the Caribbean, Jamaica‘s Digital Transformation Minister Dana Morris Dixon warns of the potential impact of artificial intelligence (AI) in the country’s thriving BPO industry. During a forum, Dixon stressed the importance of immediate workforce upskilling to protect the sector from AI disruption. The minister also suggested moving the BPO workforce up the value chain by focusing on opportunities in cybersecurity, coding, software development, and data centers.

Preparation pays off!

The outsourcing news this week​..

20 July 2023

• Digital minister urges upskilling as AI threatens Jamaica’s BPO sector – read article…
• Nigeria targets $5Bn revenue from outsourcing by 2024 – read article…
• CCaaS market estimated to hit $23.6Bn in 2032 – read article…
• TP Philippines earns spot in ICT Awards Hall of Fame – read article…

19 July 2023

• Indian IT giants target fixed-price projects for profitability – read article…
• Managed services surge as cloud spending slumps in Asia Pacific – read article…
• Outsource Fiji launches online BPO scholarships – read article…
• Deloitte Australia CEO admits excessive salary amid inquiry – read article…

18 July 2023

• Hiring surges in Indian IT, BPO sectors for June – read article…
• PEZA greenlights 4 IT parks for 2023 – read article…
• Insider Intelligence outsourcing roles to Philippines – read article…
• ibex triumphs with 2023 Contact Center Technology Award – read article…

17 July 2023

• Fiji funds $2.5Mn to boost outsourcing industry – read article…
• TCS Q1 net income up 16.8% – read article…
• Wipro net income up 12% YoY in Q1 – read article…
• Philippines poised for prolific expansion in IT-BPO arena – read article…

14 July 2023

• Wipro targets critical areas for hiring despite Q1 cuts – read article…
• Managed services reach $10Bn amid cloud spending dip, says ISG – read article…
• Ethiopian tech firms form outsourcing association – read article…
• BACCO hosts first divisional BPO summit – read article…