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BPO Journal

Thursday, September 22, 2005

Advantage MNCs

ComputerWorld has an interesting article on the competition that Indian offshore firms are facing from MNCs that are increasingly coordinating a global network of offshore bases to deliver value. The article, which draws from a recent survey by TPI, states that the MNC edge comes from:
  • Lower expectations of the financial markets of profit margins. The margins expected for multinational service companies is less than 15%, while it is close to 30% for Indian outsourcing companies. This allows the MNCs to offer a lower price relative to Indian competitors.
  • An increasing trend to outsource to multiple providers stemming from the need to lower costs further and mitigate outsourcing risks.
  • Closing of the cost arbitrage gap
Hopefully, the Indian CEOs are taking notes.

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