Monday, February 7, 2011

The world's top 10 outsourcing hotspots: India is King

India remains the favourite backoffice of the world thanks to its 'first-mover advantage' and deep skill base, as per global management consulting firm AT Kearney's ranking of the best outsourcing destinations.
The top slot in AT Kearney's 2011 Global Services Location Index is occupied by India.

"India is the all-around standout, able to provide manpower for any type of offshoring activity. With its first-mover advantage and deep skill base, it still maintains the lion's share of the IT services market," the report said.

Furthermore, the report says India has proven itself adept at competing in all dimensions of the industry, being the "pre-eminent destination and leader" in all fields of offshore services.

1. India

India has excellence in IT, thanks to its elite educational institutions, in BPO because of the large annual output of qualified graduates and in voice, because of the English language capabilities of its population.

"With its first-mover advantage and deep skill base, India remains the unquestioned leader in the index --- a half -point ahead of China and a full point in front of Malaysia.

"On top of that, India's IT services stalwarts are moving up the value chain," the report said, adding that companies such as Infosys and Wipro are developing their R&D capabilities and expanding well beyond their traditional vendor roles.

2. China

China follows next at the 2nd position. Both India and China have a good majority of educated young people with good labour cost opportunities.

China lags behind India in terms of industry size, lack of language capability, concern over intellectual rights protection. China is an important player in the Asia-Pacific offshoring sector.

China has begun offering specialised skills not only in English, but also Korean, Japanese and Chinese.
However, China may not make a great impact in the call centre arena, the report said, adding that China's most attractive avenues are high-end analytics and advanced IT, where it is an alternative to Russia and Eastern Europe.

Nevertheless, it can be a strong competitor to India in the BPO sector.

3. Malaysia

Malaysia is the third best outsourcing destination. It offers a safe business environment, good quality human capital at a low cost and strong government support, says the study.

Indonesia, Vietnam and Thailand have not yet devoted as much as they can to promoting information and communications technology, but they score highly in the index because of their vast talent pools and competitive wages.

4. Egypt


Egypt is the world's fourth best outsourcing destination. The currencies of Eygpt and Jordan are closely linked to the dollar and their competitiveness is strengthened by a weak dollar.

5. Indonesia


Indonesia is the 5th best outsourcing nation. It has the potential to compete with the Philippines.

The survey further said the global financial crisis has slowed recent offshoring moves, the percentage of companies' staff offshore may very well increase as a result of the crisis.


Layoffs at home are not translating to layoffs among offshore workers as companies seek to reduce costs.

6. Mexico

Mexico, in 6th place worldwide, leads the region, due to a sharp drop in wages over the year, the increased attractiveness of "near-shoring" and a well-developed talent pool.

7. Thailand

Thailand comes next on the list at the seventh position. Thailand and Indonesia share similarities with the Philippines but lag behind in terms of language skills.

8. Vietnam

Vietnam is a country to watch out, says the study. It has an offshoring industry focused on information technology. Japanese companies have outsourced work to Vietnam for years.
It is the 8th hottest BPO destination in the world.

Singapore has the best business environment according to the study.
9. Philippines

The Philippines is the world's 9th best offshoring nation. It is also the second largest offshoring destination, with a 15 per cent share of the global market.

The Philippines, an early entrant into the service sector, is also relatively well-rounded.
It has had more than a decade to hone its capabilities and has now moved into IT operations from being primarily a contact-centre hub.

It has many call centres serving the US market. It is now moving into IT and non-voice BPO services, states the study.

10. Chile


Chile is the 10th best outsourcing destination and a leader in Latin America. Its favourable business environment and political stability are the positive indicators.

The country is also set to join the Organisation for Economic Co-operation and Development (OECD), a symbolic entry to the league of advanced economies, says the study.

1 comment:

  1. India’s BPO industry has evolved and matured to present higher-end services that require judgment-based analysis and domain expertise, rather than function-specific, rules-based performance parameters alone. As service providers strive to offer end-to-end services, we see BPO falling into different segments. At one end of the spectrum is the traditional rules-based transactional outsourcing; while at the other end is judgment-based transaction processing and full-service business process outsourcing.

    India has won its spurs as the world’s outsourcing destination of choice. Currently the country has a commanding share of the global outsourcing market.

    India is undoubtedly the most favored IT/BPO destination of the world. This raises the question why most of the big MNCs are interested in outsourcing their operations to BPOs in India. The answer is very simple- India is home to large and skilled human resources. India has inherent strengths, which have made it a major success as an outsourcing destination. India produces the largest number of graduates in the world. The name of India has become synonymous with that of BPOs and IT industry hence the name BPO India.

    Besides being technically sound, the work force is proficient in English and work at lower wages in comparison to other developed countries of the world. India also has a distinct advantage of being in a different time zone that gives it flexibility in working hours. All these factors make the Indian BPOs more efficient and cost effective. In order to meet the growing international demand for lucrative, customer-interaction centers, many organizations worldwide are looking to BPO India.

    A subset of outsourcing, Business Process Outsourcing (BPO) involves contracting the operations and responsibilities through a third party service provider. From the last couple of years, the BPO industry has evolved as the most substantial sector in the Indian market. India has emerged as the most favored location for all Bpo services across the globe. This has accelerated the Indian economy to the heights, progressively boosting the statistics depicting the growth in the years to come and it has been however forecasted that by 2020, more than 80% of the world of business process outsourcing services will be served by the Indian companies. Marked as the best place to attain superior quality services globally, the BPO industry is strengthening its foundation in India.

    http://phykon.com/

    ReplyDelete