Emerging Locations for Outsourcing
by: Sarah Joson
Monday, June 18, 2012
Category: Outsourcing News
However, things have changed over the years. A lot of factors came in to the picture. One of which was the emergence of new players from various parts of the world, offering high quality services at competitive rates. This, in turn, has somewhat affected India’s position as the leading outsourcing provider.
An article at Huffingtonpost.co.uk enumerates several competitive outsourcing destinations that provide quality outsourcing services to firms that are looking to get significant cost savings.
Its outsourcing sector boasts strong support from the Chilean government, which is also politically stable. Incentives and investment in infrastructure are provided by the administration over the last six years. Chile is also known to take the lead when it comes to mobile telephony and broadband among Latin America countries. Moreover, it has a 96% literacy rate, and has the same time zone as New York.
If companies worldwide are looking for the most affordable location for outsourcing, Ghana is their best bet with its low taxes, rent, and labour costs. In fact, wage rates are 50-55% lower than Egypt and 60-65% lower than South Africa. Ghana is also working on several projects such as technology parks and increased research and development activities, both aimed at attracting more investors. It has the same time zone as the UK.
In the Caribbean, Jamaica is the frontrunner in the outsourcing arena and is referred to as the location to watch by global consultancy firm Gartner. Its vigorous telecommunications system and advanced financial services industry found in the Montego Bay Free Zone make Jamaica a viable outsourcing location. It also has low attrition rates, with outsourcing employees earning 40-60% lower than their counterparts in the US. Some of the services Jamaica is known to provide are debt collection, finance and accounting, customer services, insurance claims, and technical support.
Poland is a great candidate for voice-based processes as its government has widely invested on foreign languages. It is home to nearly 500 IT service vendors that provide analytics, embedded systems, and network services. It is also armed with a well-educated and reliable workforce and decent telecommunications system.
The country is not making much of a buzz compared to other locations but it is known for outsourced IT product development, particularly chip design, embedded software, and information security. The country’s talent pool is equipped with language and mathematical skills. It was ranked 25th on A.T. Kearney’s Global Services Location Index last year.
The key propeller of Russia’s growth in IT outsourcing is its robust educational system. Russia’s low-cost and highly skilled IT workforce adds to its attractiveness, plus it has strong IT support from the government. Russia serves as an offshore software development hub for organizations such as Siemens, Alcatel, and the London Stock Exchange.
Unlike in other countries, South Africa’s weak currency is working to its advantage. It is a prime location for German companies because of its German population, but in general, it has a multilingual population. UK companies outsource document production functions in South Africa as it is known to have good data and IP security policies.
The Philippines is the destination of choice for US-based companies. The country has decent infrastructure and technology. Its skilled workforce is very affordable and has excellent English communication skills. It is widely known for voice-based processes, but it is also making its way into high-end services.
It is a nearshore option for neighbouring regions that want to closely manage operations. Apart from being close to home and similar time zones, South Wales, Glasgow, and Belfast are able to provide skilled candidates at a lower cost. Glasgow is a region coveted for its work ethic. Moreover, grant assistance, sound infrastructure, and cost-effective commercial property, including purpose-built business parks, are provided by the government.
Software development is Vietnam’s strongest suit, with over 3,000 IT providers and nearly 15,000 engineers. The key drivers of its outsourcing industry are the increasing costs in China and trade issues between China and the US. One of Vietnam’s well-known feats is the opening of Intel, a $1-billion chip manufacturing operation. Factors that make Vietnam a suitable outsourcing hub are affordable office rent, hardworking workforce, industry-competitive wages, and a low cost of living.