Wednesday, August 01, 2007

Outsourcing can act as a key 'enabler' and catalyst for sectors such as telecom, organised retail, insurance, healthcare, hospitality and airlines, suugests a study.
According to a study by Everest Group, outsourcing can help the ''sunrise sectors'', which are witnessing tremendous growth for the last few years, in multiple ways, ranging from release of scarce capital, providing quality talent, innovative practices and management bandwidth.

The study further suggests that outsourcing may help these growth sectors free up their resources and focus on core business activities. ''So far, India has been seen as a leading supplier destination in the outsourcing arena. Its potential as a buyer of outsourcing has not yet been explored to the fullest. Today, sectors like telecom, organised retail, insurance, healthcare, hospitality, and airlines in India are witnessing unprecedented growth, which will further be fuelled by the increasing entry of global players, said Everest Group Country Head Gaurav Gupta.

It will be important to address the resultant operational growth challenges in these sectors to ensure that they maintain their momentum. Companies in these sectors will need to evaluate a range of 'build or buy' options, to address these constraints suitably, he added.

''Capital efficiency is a huge challenge for business leaders in these growing sectors. Outsourcing can create growth opportunities by releasing the capital otherwise required for investment in non-core assets and activities, thereby, reducing the capital investment required per unit of growth,'' said company
Senior Consultant Punish Mishra.

Outsourcing also reduces operating costs through more efficient and competitive service delivery. The study suggest that IT outsourcing alone can improve EBITDA margins by 30-50 basis points for the retailers, which is significant considering it is imperative for the retailerĂ¢€™s to expand margins.

This saving, apart from improving the bottom-line of companies, can be ploughed back into growth initiatives allowing retailers to drive additional four to five per cent growth with the same capital.

The study also highlights the impact of outsourcing and other challenges facing the country's sunrise sectors.

The study identifies issues of inadequate labour pool, poor quality talent and attrition by outsourcing to suppliers who have extensive experience in hiring in large numbers, creating a powerful engine to recruit and in training talent pool to meet global standards.



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Danielle said...

I can say that with outsourcing services, it could really make a difference to the growth of a company whose making use of it. With that, one day, I'll never get astonished when all of the companies today would be encourage to get this services.


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web designing company said...

This out sourcing reduces capital amount or cost less process can be done through..Thanks for thsi nice information.