India Remains The Leader For Offshore Services

Gartner has analysed 30 countries and assessed their suitability for offshore locations. The analysis showed that India remains the undisputed leader in offshore services, but increasingly countries such as China, Russia and Brazil are providing credible alternatives. In 2008, Gartner predicts offshore spending to grow 60% in Europe, and 40% in the US.

“The aim of the study was not to rank each country, as every organisation will have a different view of which factors are the most important for their needs, but rather help sourcing managers determine which locations are right for their organisations,” said Ian Marriott, research vice-president at Gartner.

Gartner used ten criteria that it determined important for organisations to consider when looking at a potential location for offshore or nearshore IT or business process services. They were: language, government support, labour pool, infrastructure, educational system, cost, political and economic environment, cultural compatibility, global and legal maturity, and data and intellectual property security and privacy.

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Gartner’s top 30 locations for offshore services, by region, were:

• Americas: Argentina, Brazil, Canada, Chile, Costa Rica, Mexico and Uruguay

• Asia/Pacific: Australia, China, India, Malaysia, New Zealand, Pakistan, the Philippines, Singapore, Sri Lanka and Vietnam

• Europe, the Middle East and Africa (EMEA): the Czech Republic, Hungary, Ireland, Israel, Northern Ireland, Poland, Romania, Russia, Slovakia, South Africa, Spain, Turkey and Ukraine

  In the Americas, the countries which made the final list are becoming (or in some cases are already) an attractive proposition for the largest buying market for offshore services, the United States.

  Although positioned as India’s greatest challenger in terms of its potential scale, China fared poorly for language skills. China, India and Singapore all demonstrated strong government support for the promotion of their country as an offshore services location.

  The political and economic environment remains a concern for many companies when moving work to offshore locations; in this area Pakistan, the Philippines, Sri Lanka and Vietnam all performed weakly. On the other hand, the higher-cost locations of Australia, New Zealand and Singapore all led the rating not only in this category, but also for cultural compatibility, global and legal maturity, and data and intellectual property security and privacy, proving that the link between lower risk and higher cost holds true.

In EMEA, locations such as Ireland, Israel, Northern Ireland and South Africa fared well for language skills, because of the quality and quantity of English-language speakers. However, other countries such as the Czech Republic, Slovakia, Hungary, Poland and Romania were also given credit for the availability of alternative languages that address the needs of an increasing number of continental European buyers.

In the region, the government support achieved low ratings, reflecting the amount of focus still needed to create an environment that will support the drive of these nations to become a part of organisations’ global delivery models.