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Topics under Business Outsourcing

Global Business Outsourcing Industry

Business outsourcing refers to the transfer of certain business activities or processes to an external contractor. Companies tend to outsource processes that are vital to the functioning of its business but that do not necessarily fall within the company’s specific expertise.

Competition between companies in all sectors is becoming increasingly intense due globalization, a difficult economic climate and rising customer awareness, which is directly affecting demand. Many firms are responding to the challenge by outsourcing to competent external organizations to best serve the design and implementation of business strategies.

Due to the high level of expertise of external bodies, outsourcing is one way in which companies can cut costs by availing of services that would be time consuming and costly to duplicate in-house. Outsourcing lets companies to focus all of their attention on their core business activities while external agents take care of other activities corresponding to their expertise.

Advantages of outsourcing include streamlining organizational change; generating revenue through partnerships; optimizing processes, technology and skills used; cost savings; and freeing up workers to concentrate on core competencies.

Key Market Segments

The global IT service outsourcing industry continues to show strong growth. The world data center monitoring systems (DCMS) market is forecast to exceed yearly growth of 8% between 2010 and 2014, according to TechNavio. The market is being fuelled by demand for data center network management in an effort to cut operational costs. One obstacle to market growth involves open source infrastructure-monitoring software, which is available free of charge. Leading players operating in the DCMS market include SolarWinds, HP, NetScout Systems, IB and CA Technologies.

The world interactive voice response (IVR) systems industry is expected to reach close to $3 billion by 2017, reports Global Industry Analysts. Market growth will be fuelled by pricing strategies, open standards development, greater SMB segment opportunities and technological innovation. The Asia-Pacific region is expected to record particularly strong growth over the next few years. Customer relationship management represents a market segment receiving great attention, with interactive voice response (IVR) playing an increasingly important role. Companies are replacing traditionally expensive IVR systems with open-standard IVR technologies, for example VoiceXML, which allows businesses to tailor their phone-based customer services to meet their needs.

According to TechNavio, contact centers are adapting speech recognition applications more readily due to their cost effectiveness. At present, market penetration is around 30%, leaving room for growth.

The world endpoint security industry is forecast to record yearly growth of 11% between 2010 and 2014, reports TechNavio. Market expansion is being fuelled by internet use for day-to-day tasks. SaaS-based security solutions are being increasingly adopted. One potential obstacle to market growth concerns the need to simplify network infrastructure. Leading players operating in the global endpoint security market include Kaspersky Lab ZAO, McAfee, Trend Micro and Symantec.

Regional Market Share

Central and Eastern Europe is forecast to record yearly growth in the number of customer relationship management outfits in operation of close to 11% between 2009 and 2015, reports Datamonitor. In the same period, the number of domestic location service agents is expected to record yearly growth of almost 9%. Customer service represents the leading agent position, exceeding 45%, followed by technical support, which accounts for more than 25% of the overall market.

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