Indian outsourcing industry widens geographic footprint
The global research firm Forrester says that offshore service providers will have to scale up and provide a broader geographical footprint so that international customers feel comfortable outsourcing to them. Without this option, the perceived operational risk is a deterrent to outsourcing over the long-term.
This is why Indian outsourcing service providers are setting up global delivery centers not just in India alone, but in countries outside India. This enables them to offer their clients the flexibility of a blended outsourcing model (a combination of onsite, offshore and nearshore delivery options).
The choice of the partner country is determined by the availability of skilled human resources, low-cost services, and specific language skills. India, for example, is strong in IT-BPO and English language skills, but lacking in capabilities in languages such as Spanish, Dutch, French, German, Italian or Russian. New opportunities for business growth in BPO lie in European countries requiring BPO services in these languages.
India heads the list of top 50 outsourcing destinations
With its advantages of low costs, mature vendors, technical and language skills, and supportive government policies, India heads the list of top 50 outsourcing destinations in the AT Kearney Global Services Location Index. India is followed by China, and the two countries are set to dominate the outsourcing industry for the next 20 years. Even allowing for the highest estimates of wage increases, these countries will retain their cost-advantage over other contenders.
By 2010, Indian companies are expected to earn revenues of $25 billion in the offshore BPO market, which is slated to grow at a compound annual growth rate of 37 per cent to reach $55 billion by 2010, according to a NASSCOM-McKinsey study. To compete globally, Indian service providers are developing a global footprint.
Indian outsourcing service providers are looking beyond the US and UK, which are their strongest markets, owing primarily to their English language skills. Over-dependence on these traditionally strong markets could erode India’s competitive edge in the outsourcing landscape of the future.
Indian vendors are now setting their sights on European markets, which Gartner estimates will be the markets with the strongest business growth prospects in BPO.
Choice of a partner outsourcing destination
The top 50 global outsourcing destinations according to the AT Kearney study have been short-listed based on the parameters of cost, business environment, and availability of skilled manpower.
With India and China on top of the list, South-East Asian countries like Indonesia, the Philippines, Singapore, Thailand and Vietnam fall within the top 20, and are attractive locations for Indian vendors to find partners providing outsourcing services.
Other countries like Brazil, Chile and Mexico in Latin America have found favor as important nearshore outsourcing locations for the North American market. Argentina, Uruguay, Mexico, Guatemala and Bolivia are upcoming locations offering Spanish language skills, cultural affinity and low employee costs.
Russia offers high-end technical skills and capabilities to solve complex problems. Eastern Europe is home to growing outsourcing destinations like Poland, Romania, Bulgaria, Romania and the Ukraine, which are in a position to offer nearshore support to Europe.
African countries such as Mauritius, Morocco, Senegal and Tunisia offer French-speaking skills to provide services for markets that require them.
Indian outsourcing vendors are partnering with companies in these leading or emerging global outsourcing hotspots, to stay abreast of large competitors who already have an established global presence.
The advantages are:
o Nearshoring benefits – business visits are easier to arrange rather than traveling halfway across the globe
o Similar time-zones – ease of communication
o Language and cultural familiarity – comfort level in understanding the client’s requirements
o Compatible geo-political environments – understanding of the client’s frame of reference
o Technically skilled, educated workforce at affordable costs
o Government benefits such as ‘free zones’
o Risk mitigation
o Less employee attrition
The global delivery model is enabling more companies to outsource to India, while mitigating risks, offering the flexibility of a blend of onsite, offshore and nearshore outsourcing options, and ensuring better communication and cultural compatibility with the outsourcing vendor.
This is why Indian outsourcing service providers are setting up global delivery centers not just in India alone, but in countries outside India. This enables them to offer their clients the flexibility of a blended outsourcing model (a combination of onsite, offshore and nearshore delivery options).
The choice of the partner country is determined by the availability of skilled human resources, low-cost services, and specific language skills. India, for example, is strong in IT-BPO and English language skills, but lacking in capabilities in languages such as Spanish, Dutch, French, German, Italian or Russian. New opportunities for business growth in BPO lie in European countries requiring BPO services in these languages.
India heads the list of top 50 outsourcing destinations
With its advantages of low costs, mature vendors, technical and language skills, and supportive government policies, India heads the list of top 50 outsourcing destinations in the AT Kearney Global Services Location Index. India is followed by China, and the two countries are set to dominate the outsourcing industry for the next 20 years. Even allowing for the highest estimates of wage increases, these countries will retain their cost-advantage over other contenders.
By 2010, Indian companies are expected to earn revenues of $25 billion in the offshore BPO market, which is slated to grow at a compound annual growth rate of 37 per cent to reach $55 billion by 2010, according to a NASSCOM-McKinsey study. To compete globally, Indian service providers are developing a global footprint.
Indian outsourcing service providers are looking beyond the US and UK, which are their strongest markets, owing primarily to their English language skills. Over-dependence on these traditionally strong markets could erode India’s competitive edge in the outsourcing landscape of the future.
Indian vendors are now setting their sights on European markets, which Gartner estimates will be the markets with the strongest business growth prospects in BPO.
Choice of a partner outsourcing destination
The top 50 global outsourcing destinations according to the AT Kearney study have been short-listed based on the parameters of cost, business environment, and availability of skilled manpower.
With India and China on top of the list, South-East Asian countries like Indonesia, the Philippines, Singapore, Thailand and Vietnam fall within the top 20, and are attractive locations for Indian vendors to find partners providing outsourcing services.
Other countries like Brazil, Chile and Mexico in Latin America have found favor as important nearshore outsourcing locations for the North American market. Argentina, Uruguay, Mexico, Guatemala and Bolivia are upcoming locations offering Spanish language skills, cultural affinity and low employee costs.
Russia offers high-end technical skills and capabilities to solve complex problems. Eastern Europe is home to growing outsourcing destinations like Poland, Romania, Bulgaria, Romania and the Ukraine, which are in a position to offer nearshore support to Europe.
African countries such as Mauritius, Morocco, Senegal and Tunisia offer French-speaking skills to provide services for markets that require them.
Indian outsourcing vendors are partnering with companies in these leading or emerging global outsourcing hotspots, to stay abreast of large competitors who already have an established global presence.
The advantages are:
o Nearshoring benefits – business visits are easier to arrange rather than traveling halfway across the globe
o Similar time-zones – ease of communication
o Language and cultural familiarity – comfort level in understanding the client’s requirements
o Compatible geo-political environments – understanding of the client’s frame of reference
o Technically skilled, educated workforce at affordable costs
o Government benefits such as ‘free zones’
o Risk mitigation
o Less employee attrition
The global delivery model is enabling more companies to outsource to India, while mitigating risks, offering the flexibility of a blend of onsite, offshore and nearshore outsourcing options, and ensuring better communication and cultural compatibility with the outsourcing vendor.
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