The world’s largest chemical firm, German-based BASF AG, Europe’s biggest settlement company, Euroclear and the world’s largest brewer Anheuser-Busch InBev, are looking to offshore outsource their IT service requirements. These firms are first-time customers to the world of outsourcing seeking to slash operational costs. The decision to offshore comes amid an unprecedented decline in demand for their services and products.
The escalating economic crisis is another reason why first time clients like BASF, Euroclear and Anheuser-Busch are turning to offshoring. According to analysts, new clients in Asia and Europe are thinking about offshoring decisions valued up to a billion dollars. At a time, when premier outsourcing clients like GE and Citibank are putting new technology investments on hold, new clients from Asia and Europe offer an advantage for the $40 billion software export sector in India.
BASF spokesperson, Katrin Kanellos explained in an online report by The Economic Times, “The decision in favor of offshoring is a part of our long-term strategy for ensuring the competitive strength of BASF IT Services. Currently, we are conducting a bidding process to find global service provider(s) that fit our needs best.” The firm’s IT segment - BASF IT Services is seeking suppliers that can deliver several offshore IT functions.
Decreasing operational costs by as much as 30-4-% is an important component in the offshoring strategy. BASF runs enterprise resource planning software from SAP is looking to outsource email management along with application development, etc. that can be managed from a remote delivery center. There are several first time outsourcers in Europe with the major markets being, Nordics, Germany BeNeLux and France. Since most European firms use expensive contractors, substituting them with offshoring offers drastic savings.
Along with the chemical major, Anheuser-Busch InBev, consumer goods manufacturer Electrolux, and Euroclear are also expected to award IT and back office-outsourcing deals in the near future.
Sridhar Vedala, who heads Qunatum Step, an outsourcing advisory firm noted, “As global providers are investing heavily in India, there is a general consensus that global delivery will become a standard model. Also presence of Indian provides in the market has raised awareness and confidence.”
In addition, eventful case studies on offshoring done by Nokia, Philips and ABN Amro have led to European firms getting more comfortable with the idea of offshoring. Moreover, the heightened presence of Indian IT companies like Infosys, TCS and Wipro are providing a scenario for first-time customers like BASF to reevaluate their outsourcing contracts.