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India retains No. 1 position for offshore outsourcing

Posted by Sara | Opinion | Monday 3 January 2011 4:32 am
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India retains No. 1 position for offshore outsourcingAccording to a new study by Gartner Inc., India is still the world’s favorite destination for offshore outsourcing.

The study, however, disclosed that attractive cost structures in the Philippines, Vietnam and Indonesia and the rapid growth of the business in China pose a tough competition to India’s present advantageous position.

From in.finance.yahoo.com:

Many organisations that choose to move IT services to lower-cost countries are daunted by the task of determining which country, or countries, would best suit their requirement. Gartner conducted an analysis of these countries to assess their capabilities and potential as offshore services locations, it said.

India retained its position as the most successful country among global offshore locations, as per the Gartner study. It scored well across all 10 criteria. While its cost-competitiveness is being challenged due to the rising rupee, this is compensated by its strength in other areas, as per Gartner’s study.

“Clients continue to seek a portfolio of offshore countries and with India again experiencing increasing labour costs and attrition, this is creating opportunities for other offshore locations to target the services needs of more-mature Asian clients,” said Gartner Research Vice-President Ian Marriott.

China improved its scores for “political and economic environment” from “good” to “very good”, and “culture compatibility” from “fair” to “good”.

Contributing to the increased rating for China is its rising global political and economic leverage, especially in the wake of the recent global economic crisis.

The IT research and advisory firm identified the Top 30 countries around the world for globally sourced activities in 2010-11, rating them on the basis of 10 criteria, in the study.

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