Study shows only four cities in the list of top 50 newly emerging outsourcing hotspots
Study shows only four cities in the list of top 50 newly emerging outsourcing hotspots
BANGALORE: If you are one of those tracking the outsourcing industry then better brush up your geography, as IT vendors and service providers are venturing far and deeper into the hinterland across the globe in a bid to beat the global slowdown.
Cebu City and Bacolod City (the Philippines), Ho Chi Minh City (Vietnam), Krakow (Poland), Tianjin (China), Amman (Jordan), Nizhniy Novgorod (Russia) and Cork (Republic of Ireland) are some of the fastest growing destinations for IT and ITeS outsourcing, according to a study by investment advisory firm Tholons.
While, some of the high-end work continues to be doled out to time-tested destinations such as Bangalore, contracts for less complex services are increasingly going to companies operating out of newer locations. As the global slowdown has something to do with this, the cost advantages and sops offered by respective governments is an added attraction.
Jaipur, Kolkata, Chandigarh and Coimbatore figure in the list of top 50 newly emerging outsourcing hotspots. Six Indian cities appear in the list of top eight global outsourcing destinations — Bangalore, Chennai, Delhi National Capital Region, Hyderabad, Mumbai and Pune.
These cities have a strong contender in China, which is set to become the next IT and BPO hub as several cities are establishing as a mature destinations offerings product development, R&D and testing.
China is fortifying its position by increasingly focusing on the use of English in schools and creating conducive environment for companies to set shop in China, the study said.
Guangzhou city (China) is known for engineering-services, while application development & maintenance and business analytics are now being offered from Shenzhen and Shanghai respectively. Global service providers such as Accenture, Capgemini, Cognizant, Convergys, HP, Infosys, IBM, Satyam, TCS, Wipro and Unisys have already set foot there.
Avinash Vashistha, CEO, Tholons, said clients focus on identifying (newer) outsourcing locations has driven the emergence of centre of excellence, for example - Rise of Manila National Capital Region in the Philippines — an agglomeration of 16 adjacent cities.
Though less than 1/13th of India’s population, its BPO revenues are already half as large as India’s BPO revenues.
According to the study - the theory of an individual location being a one-stop-shop has given way to smart, multi, selective sourcing models, wherein selected processes are outsourced only to the most appropriate destination.
The report sates that cost-effective destinations in Eastern Europe will increase their market share of outsourced services from customer nations in Western Europe. In this regard, Eastern European cities such as Krakow and Prague will continue to leverage their near-shore and cultural compatibility advantages.
While, smaller Asian cities such as Ho Chi Minh City and even smaller destinations such as Monterrey (Mexico) have made inroads in high-value Infrastructure Technology Outsourcing (ITO) and engineering services.
n_pranav@dnaindia.net
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