Global Business Process Outsourcing industry is rejuvenating from the economic crisis which slowed the growth prospects in various segments in different countries. As part of this, business adopted several measures to increase the profit margins through effective cost reduction systems. Business processes nowadays are increasingly becoming global which requires the industry to adopt new technologies, clients, labor, suppliers etc. IT industry is expected to evolve as a vibrant sector which focuses mainly on high end innovations as well as application of new technologies. IT service sector was affected by the economic crisis to a certain extent in terms of growth. But the industry improved and showed growth in the year 2011. On account of good economic conditions and increased demand for services, IT industry will see a growth in the coming years too.
IT services industry needs a combination of business application as well as technical expertise. This will help the organizations to produce, supervise, access and optimize information and other business processes in a better manner. This Industry offers a range of technical and professional services such as product support (both hardware and software), IT consulting, integration, development etc.
An analysis regarding Global IT market trends has been done by Lucintel (a top global consulting and research firm). Key findings by this firm is as follows –
IT Services industry market is expected to reach an estimated figure of US $1,147 billion in the year 2017.
More than 5% Combined Annual Growth rate (CAGR) is also estimated during 2012-2017. As part of this initiative, IT services industry provides growth opportunities to some of the major industry players.
One of the most important factors contributing towards the increasing opportunities in Global IT industry is due to high IT spending mainly in the healthcare, retail, transportation and other sectors.
North America dominates Global IT services industry in terms of market share. Around 42% market share is dominated by North America. It is expected that the other major outsourcing locations such as Philippines, India, China, Vietnam etc has the potential to reach the top position in terms of market share mainly on account of their talented labor force and reduced labor cost.
The new reforms introduced by the government will initiate further investments in IT domain. Apart from this, there are many new opportunities in line to support vendors. Cloud Computing is one such initiative which expects to bring in unprecedented changes in the industry. As Cloud Computing is adaptable to wide range of technologies, it will pave way to more innovative applications. This technology gives new face to enterprise computing by making use of hybrid cloud strategies like platform as a service (PaaS) and software as a service (SaaS). In this way, cloud computing can enhance the role of IT in growth of Business.
This market analysis done by Lucintel helps in getting a clear picture regarding the current trends in Global IT Services industry on a whole. An overview of the industry in terms of four regions namely North America, ROW, APAC, and Europe is tracked. This study is mainly done on the basis of the last 5 year annual market trends. A six year forecast is made which helps in advanced planning with regard to the inventory and resources for the coming years. Some of the major challenges faced by Global IT services industry include increased labor costs in some of the developed countries, lack of good talents, volatility in currency exchange rates etc. The study also anticipates that the opportunities in IT Services Market will be high due to demand for software services, high IT spending mainly in the banking and financial sectors by the government on a global level.