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World's best outsourcing providers: IBM secures top spot again, Indian firms increase and China makes the list

Global Outsourcing 100, the annual ranking of the world's best outsourcing service providers, has named IBM number one for the second consecutive year, added more Indian companies among its leaders, and recognized a Chinese company in its top 25 for the first time.

Compiled by the International Association of Outsourcing Professionals (IAOP) following a rigorous judged application process, the results also show that these 100 firms have growing sales, productivity and employment and demonstrate the continued strength of the fastest-growing segment of the world economy.

Many of the top leaders, as well as rising stars, were recognized for their innovation. Revenue among the best companies grew nearly 20 percent in 2006 to more than $170 billion. Companies on the list had on average $1 billion in annual sales. Employment by these firms was up 13 percent from the prior year to an average work force of 13,688. Based on applications received, productivity also rose to $83,000 per employee.

"Global Outsourcing 100 is a benchmark that helps executives gauge the strength of the industry as a whole and its service providers. The results show that outsourcing is stronger than ever," said Christina Powers, IAOP executive director.

"Companies on the Global Outsourcing 100 list ranged from large leaders having 332,500 employees and providing services in more than 50 countries, to smaller entrepreneurial companies from around the globe who are up and comers that will help shape the future of this industry," she said. "Despite their diversity, all winners shared strong management and employee programs, external recognition, certified competencies, customer testimonials and an increasing focus on innovation."

Rise of Indian and Chinese Service Providers

The IAOP's annual list is divided into two sections: Leaders, which represents larger, more established companies, and Rising Stars, smaller fast-growing companies that are ranked numbers 76 to 100 on the list. The association also publishes more than 25 sublists ranking outsourcing companies by the industry served, service offered and region of the world where services are delivered.

While the U.S. continued to dominate ownership of the outsourcing industry, three Indian-based companies made the top 10 on the list of Leaders, which have total combined revenues of nearly $55 billion. These companies are Wipro, Infosys and Tech Mahindra. And for the first-time ever, a Chinese company, Neusoft of Shenyang, was listed among the best 25 companies. France also had two players in the highest ranks.

Topping the Leaders list was IBM, which also garnered the highest spot in the inaugural list last year. The U.S.-based $96 billion technology giant continued to grow in size and depth of expertise. Capgemini, an IT outsourcing provider based in Paris, France, was ranked number two, rising three spots from last year, due to its exceptional ability to find innovative solutions for its customers. Other highest ranked companies were Hewlett-Packard, France's Sodexho Alliance and Accenture.

Companies on the Rising Stars list with revenues of less than $60 million come from around the world and continue to be led by India and China. U.S.-based Summit HR Worldwide was ranked in the top spot in that section. Six firms that were rated Rising Stars last year made it to the Leaders category in this year's ranking. These companies include ExlService, HiSoft, KPIT Cummins, Concur Technologies, EPAM Systems and MindTree Consulting.

Leaders Focus on Innovation

Newcomers on the list are targeting various niches, from human resource management to engineering and design services, reflecting that the industry has morphed into areas beyond contract manufacturing, information technology and back office operations.

"Outsourcing has grown beyond a way to cut costs to being used as an effective business strategy by all major companies in all industries to find the very best innovation and talent, wherever it is located in the world, to better serve their customers," said Michael Corbett, IAOP chairman. "Many of the top leaders, as well as rising stars, were recognized for their innovation."

Companies recognized as having innovation as a strength included: Mastek, EDS, HCL Technologies, Cartus, Stream, Hexaware and Syntel in the Leaders category; and Summit HR Worldwide, Datrose, Objectiva Software Solutions, Intetics Co., Smart Sourcing and Sento in the Rising Stars section.

Rigorous Criteria for Ranking

Companies were ranked on their applications by a panel of judges according to 18 criteria including revenue, growth, number of employees, skills and training of their workforce, the number of technical and business certifications held, the track record of the management team, and the quality of customer service.

The evaluation team, comprised of IAOP member professionals, was led by Jagdish Dalal, managing director, thought leadership for the IAOP and a Certified Outsourcing Professional (COP). He is a world-renowned outsourcing expert who has worked as a senior executive in customer, provider and advisor companies for almost three decades.

The 2007 panel included David Barrett, Partner, Simmons & Simmons; Chris Campbell, Principal, Booz Allen Hamilton; Dr. Tina Dacin, E. Marie Shantz Professor of Strategy & Organizational Behavior, Queen's School of Business (Canada); Vera Marques, Director South America, BASF; Mukesh Mehta, SVP, Wachovia; Clifford D. Moore III, Chairman & Co-Founder, COPC Inc.; Jean-Francois Poisson, COP, GM, Contract Management, Bell Canada; and Lisa Ross, CEO and Founder, FAO Research, Inc.

"The Global Outsourcing 100 list and sublists are valuable and essential tools for companies to use when looking to start or expand a relationship with an outsourcing service provider," Dalal said. "About half of the entrants on the list were first-time applicants, showing that companies are increasingly recognizing the value of being included on these lists."

For a full list and sublists, see www.outsourcingprofessional.org.