The Outsourcing Week in Review: Tuesday, October 26, 2021

Welcome to Inside Outsourcing: The Outsourcing Week in Review

THE WEEK IN REVIEW

Global companies have spent US$21 billion on tech and related business services in Q3 alone – further affirming the IT outsourcing industry’s value. About 61% of that figure was spent on cloud-as-a-service contracts, while managed services reached US$8.4 billion. According to tech research firm Information Services Group (ISG), IT outsourcing will continue to grow as companies are accelerating their shift to digital and cloud services. Meanwhile, according to the Monster Employment Index, hiring activity of India’s Business Process Outsourcing (BPO) industry increased by five per cent last September. In comparison, overall job postings rose by only one percent. The index shows that recruitment increased by eight per cent in the past six months despite the second wave of COVID-19 infections in the country.

As its contribution to the continent’s journey to digital transformation, tech giant Google has pledged to invest US$1 billion in Africa over the next five years. The fund will be used to build faster and more affordable internet access and to support entrepreneurship within the continent. Google aims to develop the Equiano subsea cable that will connect South Africa, and its neighbors, directly with Portugal.
In Dubai this week, several countries showcased their digital transformation in the recent Gitex Global Leaders Vision Summit. In the summit, it was announced that Africa’s young talent was expected to lead the shift in the offshoring industry, while Ghana is expected to bridge the current digital gender divide. Additionally, Egypt presented its ITC Vision 2030 that aims to transform the nation into a world-leading digital services exporter. UAE then noted their government’s efforts in addressing the cyber-pandemic issue in the digital industry.

The data center market of the Middle East is expected to increase by seven per cent through 2024. This growth is driven by the pandemic-induced digital demand and the smart city initiatives implemented in the region’s key countries. In line with this development, Middle Eastern companies are turning to data center outsourcing to support economic growth. The high-growth data center market is also hoped to become an alternative to the Middle East’s main economic driver — oil — and helping to promote environmentally friendly solutions to the region.

In acquisitions and expansions, digital consultancy transforming company Perficient acquired nearshore software development firm Overactive. Chairman and CEO Jeffrey Davis said that the new addition will boost their offshore software and digital development talents and expand the company’s Latin American presence. In South Africa, predictive analytics start-up Ramp is planning to launch its operations in Cape Town. This will help the UK-based firm gain access to the country’s local talent pool. Ramp Founders Dan Marcus and Jan Pickard said that the “entrepreneurial and hardworking” workforce there is what drove them to expand in the country. Further, as part of the company’s three-year roadmap, outsourcing provider Open Access BPO will be moving to a larger office in Las Vegas to develop its global operations and bolster its multilingual workforce.

In other BPO news, global professional services firm Genpact has taken top spot in Everest Group’s PEAK Matrix® Assessment 2021. Everest Group Partner Shirley Hung said that Genpact’s industry expertise, and digital solutions are the reasons for them topping the report. Genpact’s Chief Strategy Officer Katie Stein said that the assessment emphasized their ability to meet demands and deliver digital transformation to their clients amid the pandemic.

Colombians, prepare your resumes! Italy-based outsourcing company Comdata Group is planning to recruit an additional 800 employees to their Colombian center. This would bring the company’s total workforce to nearly 9,000 people — making it one of the largest private-sector employers in the country. Cloud computing software firm Salesforce is also planning to generate 31,800 new jobs in South Africa over five years as they open their office in the country. A study from market intelligence provider International Data Corporation (IDC) said that launching an SA operation will bring about US$5.1 billion in company revenue to the software company.

Remote work is now impacting the wages of American employees. According to a report from the AI-driven hiring marketplace Hired, salaries in the IT industry increased by five per cent in most cities in the United States. Hired CEO Josh Brenner said that the majority of companies in the job platform are now open to remote work, noting “a 5x increase since January 2020.” Remote work preferences “are also at a record high” at over 90%.

Brazil’s cyber problems are starting to get global attention. Spain-based BPO firm Atento suffered a cyberattack on its systems in Brazil, temporarily interrupting its services. The BPO said that its security team was able to quickly identify and contain the threat, ensuring the security of the affected environments before restoring them online. Atento is the latest victim of a string of cybercriminal attacks in Brazil over the past two weeks. Since the start of the pandemic, several publicly traded companies with operations in Brazil have been hacked by cybercriminals.

Lastly, the global data center construction market is facing skill and material shortages in the face of rising demand. According to the Data Centre Cost Index by construction consultant Turner & Townsend, 84% of data centers are facing skills shortages, while 87% said that a global material shortage has caused project delays. And in case you were wondering, Tokyo is named as the most expensive market for data center construction with US$12.50 per watt, amongst other cities across the world.

Hold on to your data!

Tuesday, October 26, 2021

NEWS THIS WEEK

25 October 2021

• Perficient acquires Overactive – read article…
• Data center market faces skill-shortage amid rising demand – read article…
• Phantom Space to outsource its engines to compete in the space transportation market – read article…
• Salesforce forecasted to generate over 31K jobs in SA by 2026 – read article… 

22 October 2021

• SA boosts digital skills to fight youth unemployment – read article…
• Everise appoints new CMO – read article…
• Middle East’s data center market expected to grow by 7% through 2024 – read article…
• Tech salaries increased by 5% as remote work rises – read article…

21 October 2021

• Comdata to generate 800 jobs in Colombia – read article…
• Google pledged $1bn for Africa’s digital transformation – read article…
• BPO hiring demand in India grew by 5% in September – read article…
• Open Access BPO expands Las Vegas operations – read article…​

20 October 2021

• IT outsourcing spending reached $28.8bn in Q3 – read article…
• Genpact dubbed as leader and star performer in Everest Group’s PO Report – read article…
• CCI approves Betaines’s acquisition of HGS healthcare BPO – read article…
• Guyana positions itself as UAE’s new strategic partner – read article…

19 October 2021

• China’s GDP dips to 4.9% in Q3 – read article…
• UK-based analytics start-up to expand in SA – read article…
• Dubai’s GITEX summit highlights digital transformation – read article…
• BPO firm Atento suffers from cyberattack in Brazil – read article…

Read more Inside Outsourcing Newsletters here:

1. The Outsourcing Week in Review: October 21, 2021
2. The Outsourcing Week in Review: October 28, 2021