The year is about to close and this could very well be the most interesting part of the year as predictions for the succeeding year are in abundance and this is the perfect time to see whether outsourcing predictions for the year 2011 did actually come true. Just around this time last year, Outsourcing Insider published a blog with the title “Outsourcing Sectors to Watch In 2011” where it points out that information technology and recruitment process outsourcing are the clusters that were identified to thrive this year. While on another note, the cluster of healthcare outsourcing companies were seen to maintain a stable position in the industry this year.
Outsourcing companies have been very active this year because of acquisitions, new contracts and partnerships, and extensions and renewals of existing partnerships. One of the notable acquisitions this year happened in the middle of 2011, when it was announced that Genpact Ltd. (NYSE:G), an India-based business process outsourcing firm, was to acquire Headstrong Corporation, which is an IT services company, at a $550 million price tag. Such acquisition was made to integrate IT solutions into Genpact Ltd.’s service offerings, as it is obvious that the information technology outsourcing industry is to experience an increase in demand, which indeed happened this year.
However, it is not only the IT outsourcing cluster that gained traction this year. According to the predictions for 2011 published last December 2010, it is highly likely for the finance department to seek the assistance of outsourcing companies. Just last month, the France-based outsourcing company, Capgemini (EPA: CAP), issued a press release that it has won a contract renewal with International Paper, which is a global paper and packaging company. The contract was worth 42 million Euros, and the renewal covers finance and accounting services that Capgemini will provide International Paper. This partnership between Capgemini and International Paper is indeed a remarkable partnership because it has a period that will span up to 19 years, and this is definitely one of the longest relationships in the business process outsourcing sector. However, it can be noticed that the in outsourcing industry, partnerships like these are rare and in the event that such partnership happens, main players are both large companies.
It is quite obvious that the information technology and finance departments have already showed that the predictions for the year may have pushed through and happened, but the other sectors must not be disregarded. The healthcare outsourcing market is seen as an industry staple as the demand for healthcare services are quite stable, as compared to the other industries. But in order for healthcare outsourcing companies to provide a consistent and quality service to their clients and to keep up with the demands of their clients, they needed to collaborate with another company, and it is usually an IT services provider that they partner with. According to a press release by MarketsandMarkets, “the healthcare industry has invested around 50% of its capital in Information Technology in the last 5 years.” It is also this year wherein industry spectators saw an increase in the collaborations between a healthcare provider and an IT company.
As 2011 ends, it is deemed that this year has been a good year for the outsourcing industry. It may have its own share of losses, but there are more notable instances where the industry gained positive insights.
Author: Jamee C.
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