India May Lose Most Favored Status in Outsourcing

by CXOtoday Staff    Sep 04, 2008

The firm recently released its list of top 30 locations for offshore services in 2008. The report said that countries such as Argentina, South Africa and New Zealand could take some of the spotlight off India as the offshore industry darling.

Vice president Ian Marriott said in a presentation that businesses will have to understand the location landscape whether they have a country led or vendor approach to offshore services.

Stating that while location selection is a key consideration, other factors such as cost of labor and other compensation, real compensation, real estate and other considerations such as labor rate should also be considered, as well as the political and economical environment, the report said.

Companies considering offshore services must also consider cultural compatibility and the global and legal maturity of the country they choose to locate offshore services. It said that data and intellectual property security and privacy must be considered from the effectiveness of legislation around data protection and privacy as well as the country’s enforcement of such legislation.

Gartner indicated Argentina, Brazil, Canada, Chile, Costa Rica, Mexico and Uruguay as the key locations within the Americas. In the Asia/Pacific region, Gartner listed Australia, China, India, Malaysia, New Zealand, Pakistan, Philippines, Singapore, Sri Lanka and Vietnam. In Europe, the Middle East and Africa, Gartner selected Czech Republic, Hungary, Ireland, Israel, Northern Ireland, Poland, Romania, Russia, Slovakia, South Africa, Spain, Turkey and Ukraine.

Gartner evaluated 30 countries in three world regions that could address enterprise companies’ outsourcing needs. Considering 10 key criteria, it scored the potential of numerous cities to provide the right mix of English language proficiency, local government support, infrastructure and technical considerations such as data security and privacy.

The 10 criteria Gartner used to rate countries ranged from language proficiency and availability, including written and verbal competency, to the local government support of offshore business to the potential labor pool available in the country. The infrastructure of the country including roads, rail service, air travel and ports into and around the country is also a key consideration, and the quality of the country’s educational systems were also considered in Gartner’s evaluation.