Significant changes are shaping the outsourcing industry in recent years. The outsourcing boom has brought in new entrants and of course competition. Hence, Business Process Outsourcing and IT services companies must re-evaluate their branding to succeed and achieve greater profitability.

Yes, there is growth. If there’s one industry where the sun is shining brightest, the ray of the sun is cast widest around the Business Process Outsourcing (BPO) sector. The BPO  and IT services industry appear all the most shielded as well from the economic slump. While other industries and markets wither as a direct result of the economic turmoil, the outsourcing industry continue to remain the single most vigorous in weathering the dampening situation.

Fortunately, more and more new entrants are attracted to join an industry now seen as a growth market. And outsourcing companies will benefit from having a full grasp of the whole nature of what is changing, which will be of help to assist themselves in finding their niche and strong points when repositioning for their targeted market.

Outsourcing sector’s many challenges are brought about by many converging dynamics. Staying competitive (yes, this could potentially be a burden for all of you providers out there!) is inevitable in the sea of other bigger challenges ahead. Thus, these issues are naturally shouting new brand thinking according to BrandTaxi’s John K. Grace.

• Price War. This is one in the many issues that’ll surely arise and remain constantly so. Better deal and live with it. Nowadays, there is a heightened eemphasis on low cost and oh the buyers (you will always hear them beg) for the absolute lowest priced services. Unfortunately, the new competitors in the market are making the hurdle tougher. So for outsourcing companies, what does this mean relative to branding? It’s a challenge for brands to communicate their unique value in fresh and compelling way.

• Greater Value. Aside from the cost that buyers will go looking for from a provider, they will surely look after their prospective outsourcing partner to offer greater value. This means offering new services and solutions that will bring greater and better value out of the outsourced process that buyers get. What for providers this mean? Outsourcing companies will need to understand their competitive edge in order to position themselves with clarity to buyers their unique attributes and to ensure understanding and secure engagement.

• Shifting labour costs. Again, competition has brought in the phenomenon of shifting labour costs. India is the former darling of the call centre business until the Philippines emerged out of the shell. So what could earlier been an attractive source of labour may change in the future. Somehow, technology is helping enable other areas or regions to be competitive as well. With plenty of outsourcing options to go to, buyers are expecting highly of their provider. This means for outsourcing companies, however, to reassure their partners or clients about their quality and high-value service.

• Skepticism and need for transparency. Skepticism will rise and it’s beginning to creep in now in what providers promise and actually deliver. So the plea for openness and increased transparency is louder than ever. As providers feel the pinch of this issue, they are also must learn to cope with the new set up to develop and sustain their relationships with clients in new ways. What providers can do is to use their brand assets to show how the company is committed to openness and transparency, especially in this challenging new environment.

For the second part of this series, we’ll talk about key strategies that you can use in bringing out your brand’s unique voice and personality to grow your outsourcing business.