Captives continue to expand and evolve in the outsourcing and offshoring industry, according to a study by global services advisory firm Everest Group. This is in contrast to the perception that captives no longer thrive.
The captive model for offshoring involves more sophisticated processes and requires highly skilled manpower. Based on the Everest study "Captives are Staying Alive", many large-scale captive operations have grown and expanded their service offerings. In 2010, 10 captive were set up while 13 expanded.
Everest Group's Managing Director Eric Simonson said there are two reasons captives will be an important part of offshoring. "First, it is a large part of the market, representing about 25 percent of delivery within India. Second, the model is different from third-party models and that is not widely understood. A captive can not only deliver the typical services of a [third-party] service provider, but also many other services which are just part of the normal business."
Everest Group said IT and business processes of captives were worth about $8 billion in 2006. In 2009, a 10 percent compound annual growth rate was seen in captive center activities.