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INTERDISCIPLINARY JOURNAL OF CONTEMPORARY RESEARCH IN BUSINESS
Global Offshore BPO phenomenon
JUNE 2011
VOL 3, NO 2
Business process outsourcing (BPO) has emerged as one of the leading business and
economic issues of our time. A natural extension of the free-trade movement that has been
a dominant force in global economics over the past two decades (Duening, T, N and Click
R, L, 2005). According to Forrester Research predicts that 3.3 million service jobs will
move to countries such as India, Russia, China, and the Philippines (EXHIBIT 1) that is the
equivalent of 7.5% of all jobs in the United States right now. Estimates from leading
research firms more than support this trend. The Gartner Group, a Stamford, Connecticutbased
research firm, predicts that:
One in ten jobs at specialty information technology firms in the United States will move
abroad by 2005, along with one in 20 IT jobs in general business- a loss of about 560,000
positions.
Figure 2
(Source: Duening, T, N and Click R, L 2005)
Job Expatriates shifted to Overseas
The beginnings of trend in the business process outsourcing in Europe was signaled by the
contract between BP Exploration and Andersen Consulting in 1991.by 1993, input
identified an excising market of $ 150 million (Rothery, B& Robertson, I, 1995). In
addition, the cult of core competency was reinforced by another significant management
theory in the 1990s, with that trend, organizations studied in detail way of their business
process to find ever more efficient ways of carrying them out. Armed with this knowledge
of process and frustrated by the difficulty of generating real performance gains, many
executives followed reengineering to one of its logical conclusions: outsourcing processes
to external providers that could perform them more efficiently (Cohen, L, al et, 2006).
According to the China Outsourcing latest report that 95% of the World Top 1000
companies (Fortune) has made their offshore strategy. And averagely 5 -10 companies are
doing on-the-spot investigation in potential offshore destinations every week. Furthermore,
in the rapid-growth phase at the inception of the internet –based economy, many
organizations experimented with outsourcing in an effort to accelerate time to market,
manage growth, and gain access to hard-to-find and expensive skills. During the downturn,
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