The Impact of the Global Economic Downturn on Outsourcing and Offshoring by the Everest Institute
By:fernando on:Wed 15 of April, 2009 12:46 EDT (227 Reads)
Topic image Click here (external link) to download the PDF file with the Everest Research Institute paper.





Report Excerpt


Executive Summary
Now that the U.S. economy is "officially" in a recession along with a dire
outlook for 2009, the prospects for outsourcing, ironically, appear much
better. The negative economic outlook remains discouraging; but the greatest
hindrance to outsourcing is uncertainty, and the economy is finally moving
beyond that noncommittal midpoint.

In preparation for a difficult 2009, executives are evaluating programs they
can prune, investments they can postpone, and projects they can terminate
without impacting company strategy. Given that most companies outsource at
least one operation, it is natural that some outsourcing contracts will be partly reduced in size or scope as part of this adjustment.

In 2009, Everest Research Institute believes that increasing numbers of
companies will take a more strategic view of operations. Companies will
examine methods to reengineer business processes or to restructure backoffice
operations, resulting in an increasing number of outsourcing
opportunities during 2009.

As the economy recovers, Brazil can play a stronger role in providing
globalization services to the United States and Europe. With its cultural and
geographical affinity to the United States and Europe, Brazil can be an
alternative to India as globalization matures. Rather than displacing India,
however, Brazil should expect to become an alternative for risk diversification,
competing with Eastern Europe and China, Brazil must demonstrate how it
can integrate into a global delivery structure rather than compete directly with
India.

Brazil's domestic market is also likely to see some increased competition as
outsourcing players from around the globe seek new growth markets. Both the
nature of competition and the industry structure may evolve as players seek to
compete more aggressively for business in Brazil.

This report examines the following topics:
• U.S. and European market pressures
• Impact on service exports
• Impact on Brazilian domestic market