'Outsourcing to act as catalyst for emerging sectors'

Indian outsourcing industry could act as a catalyst for the growth of emerging sectors including telecom, organised retail, insurance, healthcare, hospitality and airlines among others, says an Everest Research report.

The study, titled, "Staying on course with the growth agenda - Potential for outsourcing to drive India's growth sectors", states that outsourcing may help the emerging industries by providing quality talent, solutions to the scarcity of capital along with innovative practices and management bandwidth.

Gaurav Gupta, country head, Everest Group, said ,"so far, India has been seen as a leading supplier destination in the outsourcing arena. Its potential as a buyer of outsourcing has not yet been explored to the fullest. Today, sectors like telecom, organised retail, insurance, healthcare, hospitality, and airlines in India are witnessing unprecedented growth, which will further be fuelled by the increasing entry of global players."

Identifying that capital efficiency posed to be a major problem for the growing sectors Punish Mishra, senior consultant, Everest Group and co-author of the report, said, " Outsourcing can create growth opportunities by releasing the capital otherwise required for investment in non-core assets and activities thereby reducing the capital investment required per unit of growth. "

According to the analysis provided by the firm, the retail segment could witness a 30-50 basis points in the EBIDTA margins through IT outsourcing, besides an improvement in the bottom line, which could lead to an additional growth of 4-5 per cent with the same capital.