The global ITO market is set to grow 3.5% in 2013, according to recent projections from HfS Research. While ITO performance in the Europe, Middle East Asia (EMEA) market is expected to continue to be poor this year, HfS expects recovering growth in North America as well as increased demand for IT infrastructure services in non-traditional markets to compensate.
Total market size for the global ITO industry is expected to reach $648 billion this year, with professional services representing $309 billion of the total. Application development and maintenance (ADM) outsourcing will represent another $70 billion, while IT infrastructure management will drive $143 billion in 2013 revenue.
ADM ITO will experience 4.8% year-over-year growth, the highest percentage of any ITO vertical covered by HfS. IT infrastructure management ITO will see 3.8% year-over-year growth and professional services will undergo 3.1% year-over-year growth.
Regionally, North America and EMEA (Europe, Middle East, Asia) will continue to account for the vast majority of global BPO contracts.
HfS Research also makes the following market predictions for the global BPO industry this year:
• Organizational approaches to outsourcing and shared services will mature. Execution will replace excuses.
• Two-thirds of ITO-buying organizations will look to improve sourcing capabilities beyond meeting “green lights metrics,” with an emphasis on change management and shifting the corporate mindset from cost to value.
• Mid-market ITO buyers will seek horizontal solutions while high-end buyers will look for analytics.
• ITO providers will deliver cost reduction and efficient services.
• ITO providers will need to improve their delivery of innovation, analytical capability and the skilled talent needed to define business outcomes.
• The Indian ITO industry will have to contend with closing cost differentials for mid-level services, especially compared to European providers. ITO buyers will also question the effectiveness of offshore ITO for higher-level services.
• ITO buyer need for tactical assistance in achieving advanced analysis and innovation will create a necessity for providers to offer high-quality, properly trained talent.