The report estimates that regional market value will grow from US$13.7 billion in 2008 to US$20.3 billion in 2011, with the majority of that revenue being generated in the growth markets of India, the Philippines, Malaysia and China. In the short term, the impact of the global financial turmoil – especially amongst the Banking, Financial Services and Insurance (BFSI) sector - will make outsourcing budget cuts inevitable. While this is likely to lead to a slowdown in growth, continued pressure on financial institutions to curb capital costs will help to ensure existing outsourcing contracts are not scaled back.

The study predicts a short-term decline in offshoring activity, or the practice of relocating contact centre operations to outsourcing hubs as a means to control capital expense. In the medium-to-long term however, large vertical markets including BFSI, telecommunications, high technology and airlines are expected to lead the return to offshoring as a means of outsourcing processes and curbing costs.

The report notes that an increasing number of large outsourcers are offering combined voice and data solutions for customers, providing business process outsourcing services ranging across financial, accounting and human resource functions. Local outsourcers such as Salmat, UCMS and Stellar have been offering similar services for nearly a decade but Australia's high labour and operational costs have resulted in limited domestic demand and Frost & Sullivan cautions that these players are unlikely to attract strong international market demand.

Amongst the main growth markets, India is believed to be best poised to move up the value chain through its strategy of offering more data services to foreign clientele. One sector predicted to grow is the small-to-medium business (SMB) market. In the face of a recession, smaller players are finding it increasingly difficult to compete with larger multinationals and are turning to contact centres and outsourcing of processes to limit expense and tighten budgets. This trend is already evident in Australia and is expected to continue to grow throughout the region.

The major growth opportunities for the contact centre outsourcing market are expected to come from expansion of existing client relationships; the creation of higher value offerings such as specialised knowledge processes, business intelligence and analytics; new services for the SMB market; and via consolidations such as mergers and acquisitions between smaller players.

“When the last economic slowdown hit in 2001, offshore outsourcing was in its infancy, so this is the first recession that the industry has had to deal with,. We've no precedent to fall back on,” notes Frost & Sullivan industry manager Shivanu Shukla. “Without precedence, it is difficult to predict how the customers, vendors and outsourcers will react to the challenges ahead. In the short term however, there's a good chance that the outsourcers will outperform most, if not all of their customers' businesses.”