Research firm Everest Group recently found out that the volume of new IT and business process outsourcing (BPO) contracts dipped 20 percent from 516 during the second quarter in 2011 to 411, same quarter this year.
Salil Dani, Practice Director for global sourcing at Everest Group, said the market is continuously growing but the rate is slowing down. Moreover, the drop in the number of outsourcing contracts was said to be caused by the debt crisis in Europe and other economic issues worldwide. Dani noted that majority of IT spending in Europe are at a standstill.
Dani added that businesses based in the US are now uncomfortable with outsourcing due to the recent events regarding the anti-outsourcing bill. On the other hand, some US companies are starting to subcontract locally, but are still fewer in number since outsourcing locally does not offer the same benefits that destinations such as India and the Philippines can provide in terms of costs and availability of talent.