Troubled SMEs to create more outsourcing demand – Says Telegenisys inc.

April 13, 2008

Fairfield, CA – Global downturn, precipitated by the US subprime crisis may be making things difficult for businesses worldwide, but there are still plenty of reasons to smile, especially for the business process outsourcing industry in India. This has been revealed by Telegenisys Inc, one of the leading providers of offshore outsourcing services. Telegenisys anticipates that in the near future it will be the SMEs (Small & Medium Enterprises) that will create a larger share of the outsourcing demand. Already catering to the outsourcing needs of many US based SMEs, Telegenisys is currently upgrading its infrastructure and manpower so as to meet the rising demand from SMEs, which it anticipates in the near future.

These projections are based on the fact that SMEs in the US have been the most affected by the subprime meltdown. Currently, most of these SMEs are finding it difficult to achieve their desired sales and profitability targets and the ones that have taken the severest beatings are trying hard just to stay afloat. Telegenisys says that if these entities want to survive the current onslaught, they will have no other option, but to outsource their non-core processes to cost-effective offshore outsourcing companies.

The contribution of SMEs in the overall outsourcing business has been steadily rising and this is one of the main reasons as to why Telegenisys is betting on these entities for future growth. In the previous year, the overall business generated by SMEs totaled to around $6 billion, but this year, by March, it has increased to about $7 billion. Considering the pace at which things are moving ahead, Telegenisys expects that the overall contribution of SMEs will exceed $8 billion by March of 2009 and around $11 billion by March of 2010. This will be around 20 percent of the overall industry, assuming that the total value of outsourced work by US-based companies at that time would be around $55-56 billion.

Telegenisys foresees great potential, because in terms of volume, US based SMEs account for around 80 percent of the business. It says that when more of SMEs start accepting the potential benefits that can be derived from outsourcing, it will lead to a significant increase in demand for outsourcing service providers. This trend has already started, but considering there are 20,000 SMEs in the US, most of which have still not started outsourcing, it seems there exists a goldmine that’s just waiting to be explored.

By routinely upgrading its infrastructure and reviewing its manpower needs, Telegenisys, is getting ready to tap this emerging market and make the most from the opportunities that it will provide.