Friday, January 8, 2010 |
A tumultuous year in outsourcing in 2009 concludes and a new year in the form of 2010 will see a host of emerging developments from the previous year bear full fruit. 2009 marked a year in which leading service providers transitioned towards being global-centric outsourcing providers. As each major outsourcing city has its own specializations, we will increasingly see buyers packaging services to multiple locations or supplementing existing relationships with new ones in emerging markets. Here is a list of six offshore destinations to look out for this year:
According to Equaterra consultant, Vibhash Ranjan, China will likely be the favorite outsourcing destination of neighboring Asian countries – particularly in Japan, if it can improve on language skills. Although a promising IT services location, China is plagued by a lack of English proficiency and IP protection concerns among others.
India's heritage companies will likely aggressively expand to offshore locations, notably in the US and UK. Look for providers to continue to relocate work to tier 2 cities such as Pune and Chennai. India's share of the outsourcing market will continue to be dominant in 2010.
Africa and the Middle East
South Africa and Egypt are both locations to look out for here as they work together to market their outsourcing services. IT developments that connect East and West Africa with the rest of the world will make way for developing markets like Ghana and Kenya.
This continent will likely garner deals from large multinationals this year (namely from nearshoring in the US) as service providers expand – making acquisitions in Mexico, Argentina and Brazil.
TPI Momentum managing director, Melany Williams believes the Philippines will surpass India in terms of outsourcing growth rate. However, it will face fierce competition from Singapore and Malaysia for IT and BPO services.
The United States
This is a strange inclusion as it is not traditionally an offshore outsourcing destination, but it remains a competitor to the aforementioned locations. Analysts predict an increased interest in prospective BPO or IT centers in low-cost locations in the US. Alsbridge consultancy CEO, Ben Trowbridge, believes that given the unemployment rate (over 10 percent), “qualified resources are willing to work for lower wages”.