Topic: Offshore Locations – Plans and Perceptions of Buyers and Service Providers (2012-14)

While the global economy grew in 2011-12, economic uncertainties and recessionary trends were still prevalent in areas like Europe. At the same time, the global services market continued to grow as companies increased their offshore leverage through both global in-house center (GIC), formerly captive, and service provider models. Further, the offshore geography is expanding with new locations emerging across Asia, Central America, and Eastern Europe.

Everest Group administered a survey in March 2012 to understand perceptions and plans related to global services locations across multiple stakeholders – buyers of global services, service providers, consulting/advisory firms, country associations, and investment promotion agencies. The survey attracted 254 respondents comprising mid- to senior-level executives working with leading buyers and service providers. In this document, we present a summary of how buyers and service providers are thinking about their expansion plans, specifically with respect to scale and locations. We also explore typical location perceptions of these organizations.

Key takeaways: 

• Buyers and service providers demonstrate different intent towards their offshoring growth plans for the next two years:
  • Buyers continue to remain optimistic about the future of the global service industry but are cautious about increasing their offshore adoption
  • On the other hand, service providers have indicated ramp-up plans to increase their overall offshore scale. They plan to fuel their growth through a combination of expansion in existing locations and new delivery locations
• India continues to be the most preferred destination amongst both buyers and service providers, followed by China and the Philippines
• Despite an overall cautious approach compared to previous years, players have indicated plans to add new locations, typically emerging/nascent locations, to their current portfolio. These location expansion plans are driven by factors such as concentration risk diversification, cost pressures, and the need for domain/niche skills (e.g., multi-lingual support).

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