Business transformation will intensify technology outsourcing in 2007 and India will continue to be the prime destination for IT Services, according to a new research report. The services globalisation industry is predicted to continue its growth at a brisk rate of 25-30% in the coming year, according to NeoIT, a California-based consulting firm.

This is due to the fact that companies will increasingly keep ramping up their services globalisation initiatives. “Business transformation through services globalisation is one of the most important levers that global companies can no longer afford to ignore,” NeoIT CEO Atul Vashistha said. Though, buyers will look for cities of excellence in other countries as well, where they can leverage employee skills, India will continue to be the top destination for IT services.

M&A activity is predicted to increase this year, with outsourcing services companies buying consulting firms or those firms that have local knowledge in the countries where their customers reside. Among the 2007 trends predicted by the consulting firms was that firms in countries like India, the Philippines and Russia, would be acquired by companies from developed countries, to gain access to lower-cost talent.