A survey conducted by global consultancy firm Frost and Sullivan has ranked India as the top destination for shared services and outsourcing.
NEW DELHI: India, known as the back-office of the world, is expected to face stiff competition from countries like China, Malaysia and Singapore even as the industry is pegged to reach a global market size of 1,430 billion dollars by 2009 end.
A survey conducted by global consultancy firm Frost and Sullivan has ranked India as the top destination for shared services and outsourcing (SSO) across various verticals, followed by China, Ireland, Singapore, Malaysia, Mexico, Czech Republic, Poland, the Philippines and Canada.
Low labour costs and abundant supply of skilled manpower are the key factors behind India's sustenance as the top outsourcing destination globally.
The outsourcing sector in the country is experiencing consolidation and SSO providers are maturing and moving up the value chain, expanding their onshore presence to strengthen global delivery capabilities, the report said.
But there is a threat from countries like China which is fast emerging as an attractive destination for outsourcing IT, Research and Development and procurement services, it added.
India's growth is beleaguered by factors like high attrition rates, poor infrastructure, rising wages and appreciation of rupee against US dollar, the report said.
"SSO is no longer just about cost arbitrage, instead SSO operators are adding value through their skill sets and competencies wherever they are located," Frost & Sullivan Vice-President Asia-Pacific (ICT Practice) Nitin Bhat said.
The study also forecasts the global SSO market will grow at a compound annual rate of 15 per cent to reach a market size of 1,430 billion dollars by end-2009.
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