This IDC study highlights the strategies of the tier 2 outsourcing providers that are revisiting their go-to-market initiatives to address the opportunities arising in the Australia market as a result of the selective outsourcing trend.

"Tier 2 outsourcing SPs are positioning themselves as niche players focusing only on well-defined capabilities in which they can deliver high-quality services. One of their big advantages lies in having lower internal cost structures compared with the tier 1 providers. Since the tier 2 providers are now competing in the domain of the tier 1 providers, they have to demonstrate business value-based relationships beyond those based on just cost savings and asset redistribution," says Aprajita Sharma, senior analyst, Outsourcing and BPO, IDC Australia.