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India and China Strongly in Top 20 Global Outsourcing Locations

Oct. 21 – Bangalore, Delhi, Mumbai, Chennai, Hyderabad and Pune were among the eight top global destinations for outsourcing of services, according to the “4th Global Services-Tholons Top 50 Emerging Outsourcing Destinations” survey, jointly conducted by CyberMedia and Tholons, a services globalization advisory firm.

The other two entrants are Manila in the Philippines and Dublin, Ireland. The next 10 outsourcing destinations are considered to be “Top 8 Aspirants,” and from a total of 68 destinations, are dominated by Shanghai, Beijing and Shenzhen in China, Ho Chi Minh City and Hanoi in Vietnam, and several cities around the globe including Krakow,Buenos Aires, Cairo and Sao Paulo.

“For a CIO today, finding a center of excellence is more than just lower cost,” said Avinash Vashistha, the CEO of Tholons. “It must consider location, risk mitigation for business, cultural affinity and scalability of the skilled workforce. Service providers need to think through their offerings so as to differentiate as the competitive advantage is rapidly vanishing due to cut throat competition and market saturation.”

India continues to top the list with revenues of US$40 billion in IT-BPO export services in 2008. Indian IT-BPO export services posted 35 percent year on year growth rates in the last five years. Interestingly India’s FDI inflows posted the largest increase globally at 46 percent in 2008 – from US$25 billion to US$46 billion even as global FDI flows decreased from US$1.9 trillion to US$1.7 trillion and several developing economies struggled to acquire investments from client nations. Compared to the previous year’s rankings, this year’s study reveals minimal shifts in rankings because of the overall slowdown in the pace of outsourcing activity in the face of global recession.

Seven Chinese cities – Shanghai, Beijing, Shenzhen, Dalian, Guangzhou, Chengdu and Tianjin – and six Indian cities – Chandigarh, Kolkata, Coimbatore, Jaipur, Bhubaneswar, Thiruvananthapuram – make it to the list of the next 60 outsourcing destinations. The study lists India, the Philippines, Ireland, China and Brazil among top five offshore nations with a “high degree of maturity and record of successful delivery capabilities.” Canada, Russia, Mexico, Vietnam and Poland are listed as the top five emerging nations.

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2 Responses to India and China Strongly in Top 20 Global Outsourcing Locations

  1. Jeny says:

    India still dominates the whole outsourcing industry, but good to see the Philippines, for this latest survey, particularly Manila NCR as one of the most favored city destination for outsourcing.

  2. Chris Devonshire-Ellis says:

    Asia as a global service center is developing. We’re producing an Asian Comparator next week as an issue of China Briefing – http://www.china-briefing.com. It uses New York as a benchmark and details Hong Kong, Singapore, Seoul, Taipei, Bangkok, Kuala Lumpur, Beijing, Shanghai, Jakarta, Delhi, Mumbai, Manila and Hanoi, and compares them with each other in terms of costs, prices and so on. If you have interest in the subject look out for that. Thanks – Chris

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