Released on = July 18, 2006, 3:15 am

Press Release Author = KPOAsia.com

Industry = Financial

Press Release Summary = Many multinational companies who were outsourcing in past,
are now too cautious in outsourcing their business.

Press Release Body = According to recent Global IT outsourcing survey taken by Midas
Outsourcing Management Pvt. Ltd., (MOM) an outsourcing and consulting firm has shown
that multinational IT companies, who are outsourcing their business regularly are
now taking steps cautiously as the market is getting matured enough.

"We think that IT outsourcing business is now losing the steam. The IT boom is now
slowly coming to end. Hence, companies who are regularly outsourcing their jobs,
will now first taste the water prior to outsource their jobs in one short", says
William Lehman, senior outsourcing marketing advisor.

"We observed that many outsourcing buyers who are near completion of their
outsourcing contracts are now thinking for renewal in favor of the same outsourcing
company due to various reasons including prime factor of rising pricing cost. Other
factors like rising up of new outsourcing local companies are also influencing
multinational companies' decision-making," he said

According to MOM, companies who are outsourcing their jobs have realized that
complete dependence on IT outsourcing companies is not practically possible. Also,
companies can not outsource the complete IT jobs to them, though some part of it
would be helpful for companies to pay attention towards their core competencies.
Some of them complained the complexity of managing IT outsourcing jobs. Others found
that their outsourcing providers are over-promised and under-valued in delivering
results.

"Though IT outsourcing jobs are growing with whopping 50% which indicates the robust
growth of the IT outsourcing industry, but declining graph of pricing also shows the
maturity or saturation of the outsourcing market. Around 10% of the IT companies are
going to limit the outsourcing budgets for the next year," says William Lehman.

However, IT outsourcing industry has potential to bounce if it takes appropriate
steps in cost-reduction, quality improvement, and timely delivery.

"We are seeing a drastic change in the companies' approach outsourcing their jobs.
Now, many multinational companies are going for "backward integration" by blending
an efficient employees staff onshore, hiring the most efficient outsourcing provider
at a very competitive price, third-party processors and establishment of efficient
co-ordination between onshore and offshore outsourcing resources," William Lehman
explained in his concluding report.

Please do visit at http://www.kpoasia.com to know more about knowledge process
outsourcing.



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