The Shared Service Outsourcing (SSO) market for 2006 – currently at approximately $930 billion USD – is projected to see growth to $1,430 billion USD by 2009, a growth rate of 15% at a CAGR, and offshoring, a small part of the pie, is expected to double its overall growth rate.

Traditional drivers for SSO are cost beneficial through standardization, scale benefits, and cost arbitrage, but some destination countries are offering domain knowledge-based services, and leading companies are outsourcing for access to talent and skill-sets not available in their country. Despite the threat of loss of control and confidentiality, this has resulted in diversification of the SSO locations rather than scaling down such operations.

Emerging operating models are becoming much more effective, and while captive models and third party models dominate, hybrid models with equity participation, joint ventures and project funding are increasing. Governments in top SSO locations offer various incentives to attract capital; however, structural factors like low labor costs and relevant skill supply are still key drivers for locations.

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