10 Outsourcing Predictions for 2008 (and One to Grow On)

From widening currency gaps to industry mergers and acquisitions to an expanding range of outsourcing services and destinations, the new year should keep IT service providers and customers on their toes.

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It's been a dynamic year in the information technology outsourcing industry. The Indian rupee rose to record levels while the U.S. dollar declined against most major currencies, impacting global IT service providers and customers alike. Merger and acquisition activity went into high gear (with the exception of poor Affiliated Computer Services, which tried—and failed— for the second time to go private). The consolidation activity was most notable for the inroads Indian providers made into the U.S. market by buying local providers. And Mumbai-based Tata Consultancy Services announced a $1.2 billion IT service deal with The Nielsen Company, technically the biggest offshore contract to date, hinting at the increasing maturation of the offshoring market. Buyers of IT services also began to look beyond India to balance their offshore outsourcing portfolio, from Shanghai to São Paulo and more than a few spots in between.

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According to the predictions IT outsourcing analysts are making, the headline for 2008 in the IT service market could be "the more things change, the more they stay the same." Experts expect the rupee to continue its rise, keeping global IT service providers and customers on edge. Industry consolidation will continue. The offshore outsourcing market will continue to develop, in India and beyond.

But don't expect everything to remain status quo in 2008. This could be the year call centers shape up, IT service providers figure out a way to provide more of the innovation their clients crave, and outsourcing customers finally get smart. Read on for more trends to keep an eye on in the new year, and add your own forecasts.

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