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Watch for social responsibility, global talent wars and a shakeup of power in outsourcing.

Socially responsible outsourcing, global competition for talented employees and a power shift among outsourcing players will be among the key trends in the coming year, predicts the International Association of Outsourcing Professionals (IAOP).

Among the top five outsourcing developments to watch for in 2008 forecasted by IAOP Chairman Michael Corbett and Managing Director of Thought Leadership Jagdish Dalal are:

1) Socially Responsible Outsourcing

Outsourcing increasingly will be recognized for the value it brings to communities around the globe and companies engaged in outsourcing will be acknowledged for being good corporate citizens.

“With the shaky U.S. economy, presidential elections looming and a heightened awareness of how everyone’s actions impact the environment, outsourcing is poised to go politically correct in 2008,” Corbett said.  

Companies providing, using and advising on outsourcing will become known for adhering to and advancing the highest ethical standards, contributing to communities, bettering the environment, and expanding career opportunities and training for employees, he predicts.

IAOP recognizes outsourcing leaders for their contributions to business and society through its “Outsourcing Hall of Fame” award program that has inducted senior executives from such leading companies as Capgemini, Procter & Gamble, Accenture and Applied Materials.

2) Outsourcing Professionals Wanted

Outsourcing professionals will be sought after, valued and compensated for their important role in business. Today, more than 150,000 professional are involved in the $6 trillion global outsourcing industry and these numbers and the professionalism of the industry is only expected to continue to grow.

“The C-level suite is recognizing the importance of outsourcing,” Dalal said. “More and more outsourcing professionals will sit at the executive table with senior executives and define the very shape of business.”

IAOP continues to see strong interest in its outsourcing certification program. Teams of professionals and individuals from companies around the globe are receiving the industry’s first and sole professional certification – the Certified Outsourcing Professional (COP).

3) Global Talent Wars

Attracting, developing and retaining talented employees will become a major challenge for both outsourcing service providers and businesses building their internal capabilities as outsourcing increases in developing countries, especially India.

“The global talent wars will further widen the economic gap between the cost of talent management and expected cost baseline,” Dalal said in looking ahead.

4) Power Shifts from Dominant Players

Outsourcing industry leadership will move from a small group of U.S.-based service companies who have dominated the industry since its inception, including IBM, EDS, CSC and Accenture, to include foreign companies that are growing, such as TCS, Infosys and Wipro.

“The landscape is shifting, with large U.S. companies becoming major ‘offshore’ players while offshore players are establishing U.S. footholds through acquisitions and by establishing their own facilities,” Corbett said.

IAOP is seeing this trend in its annual ranking of the world’s best outsourcing service providers, Global Outsourcing 100. For the past two years IBM has remained at the top of the list but increasingly, Indian-based companies are rising in the top 10 ranks.

5) Globalization: A Race to the Finish Line

While businesses race to build their global talent portfolio, the best will all have their basics in place by the end of 2008. What was until just recently a new strategy for companies to offer competitive differentiation is now required of all.  Any company not already well into the outsourcing game is at serious risk in today’s economy.

“Although the ink may be barely dry on the first revision of Tom Friedman’s book, The World is Flat, the globalization end-game is already in sight,” Corbett said.

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