Top 50 Emerging Global Outsourcing Cities - Tholons

More documents

Recommendations

Info

Special ReportThe gateway to the global sourcing of IT and BPO servicesRegion-wise breakup of the top 50 emerging globaloutsourcing cities 2009(%)14268 4101010414Top & Next 5 Offshore NationsEstablished offshore nations with a high degree of maturityand record of successful delivery capabilities are categorizedas the Top 5 Offshore Nations. These countries typicallyhave centers of excellence across multiple outsourcingsegments and rank highly in a number of location-assessnnnnnnnnnCentral AmericaEast AsiaEastern EuropeMiddle East and AfricaNorth AmericaSouth AmericaSouth AsiaSoutheast AsiaWestern EuropeTotal Votes Polled: 143Source: Global Services and Tholonsplaces from the last year’s ranking is Kolkata. The city hasrolled down by 9 places to reach the 15th position in the2009 Top 50 Emerging Global Outsourcing Cities list.Kolkata was considered to have the potential to becomeanother hub in India, but due to the recent developmentsthere is a cognizable alteration in the way the city is perceived.Significantly increased concerns about labor risk, sociopoliticalrisk, bureaucracy and corruption have hinderedthe progress of Kolkata and the entire state of West Bengal asa whole. Some of the incidents that have contributed to this.The land problem of tech companies such as Wipro and Inofsys.Number of strikes (bands) during the last year, at leastone major strike every month. Tata plant at Singur receivedthe attention of the international media, that was the reasonfor the drop in rank last year. Apart from the deterioratingbusiness environment, the major factor is that due to therecent sequence of events and negative publicity—no customeror service provider is looking at Kolkata seriously.The rankings of other cities were more or less the same,except for San José, which ranked at the 20th position thisyear (up by seven places from the previous year) followedNearshore has become an importantcomponent of outsourcing andLatin America has become the hotspot. The region has attracted a lotof attention during the last year.However, most of its part suffers dueto the high risk componentby Rio de Janeiro (up by five places) and Guadalajara (upby five places).Nearshore has become an important component of outsourcingand Latin America has become the hot spot. Theregion has attracted a lot of attention during the last year.However, most of its part suffers due to the high risk component.San José, however, is perceived as one of the safest destinationsto do business. Costa Rica ranks as one of the safestcountries for investment in Central America, as risk ratingfirms and the Central American Monetary Council confirm.Majority of the population is fluent in English, making itthe only country in the region, which is low risk, and offersrelatively improved scalability. Other advantages like multilingualcapabilities, proximity to the U.S., Central Time Zone,good infrastructure, Spanish language capability and incentivesprovided by the government are added value, which arenow considered almost basic requirements when making animportant choice on BPO. Low corruption, exchange ratestability and geopolitical conditions in the city of San José,Costa Rica is another value proposition. Successful expansionby firms like HP, People Support, Sykes, Teletech and toan extent by IBM, Fujitsu during the last couple of years issignificant, now employing over almost 20,000 people in theoutsourcing industry. The effects of Intel locating in San José(1996) has been very significant, as the center for assembly,testing and other similar processes was established and expandedin the capital. This has had a positive ripple effect onother businesses and industries. This has also ‘upgraded’ theskills capabilities of the local labor pool.8 GlobalServices www. globalservicesmedia.com October 2009
The gateway to the global sourcing of IT and BPO servicesSpecial ReportOutsourcing CityClustersWe noticed an interesting trend this year: Some of the cityclusters have started to surface. They also have some futurepossibilities to emerge as outsourcing city clusters. Theseclusters are based on the seamless nature of talent pool in theirgiven region, and the availability of talent pool in the proposedclusters are not limited or restricted to individual city limits, administrationand/ or national and international boundaries. Thefollowing are the basic qualitative and analytical factors consideredfor identifying a cluster:>> Time to Travel>> Means and Ease of Transportation>> Affinity (Economic-Social-Political-Cultural)>> Future convergence due to outsourcing activities/capacities.This is a significant development due to the fact that servicesglobalization has now reached a level of maturity where it hasDelhi NCRthe capability to influence the development of cities—this is aclassic case of globalization and its impact on the offshore landscape.Some of the city clusters categorized by regions are:>> Southeast Asia: Manila NCR>> South Asia: Delhi NCR>> Southeast Asia: Kuala Lumpur-Cyberjaya>> South Asia: Hyderabad-Secunderabad>> South America: Greater São Paulo. GSment scenarios. These five countries offer the strongestvalue propositions to clients based on the Location AssessmentPlatform and are considered as prime locations whenconsidering specific outsourced processes. These emergeddestinations will most often also have the unique advantageof scale and capacity as compared to smaller or emerginglocations.The difference between the Top 5 and the Next 5 offshorenations is most pronounced in the service-level maturity.In terms of potential, the Next 5 are not far behind, howeverthis potential is considered to be still unrealized dueto specific inhibiting factors. It also must be stated that theservice-level maturity has been taken into considerationfrom the client point of view, as client nations look at offshorenations in a distinct manner. This has been taken intoconsideration when categorizing locations. This customerperception may change or alter over time, but takes significanteffort and time on a destination’s operational front.Successful service delivery is the most significant factor inaltering customer perception.About the StudyGlobal Services and Tholons have been conducting thisstudy titled “Top 50 Emerging Global Outsourcing Cities” forthe fourth year in a row.In the first study, which was conducted in 2006, we hadidentified top 50 emerging global outsourcing, withouthaving them ranked. In the very next year, we dedicated afull team to identify and rank top 50 emerging outsourcingcities as well as top 5 global outsourcing cites. Besides themain top 50 list, the Global Services and Tholons team extendedtheir top outsourcing global cities’ list from top 5 totop 10 and also named top emerging and established outsourcingcities by functions.This year again, we have introduced a new categorynamed “Top 10 Aspirants.” The cities mentioned in this categoryare the ones that have potential to enter into the mainlist in the coming years and are being supported by theirgovernments to develop and facilitate outsourcing sectors.In addition, we have not only identified three to six establishedand emerged cities by functions but also haveintroduced three new sub categories—Animation / GameDevelopment, Health-care Services and InfrastructureManagement Services. Other categories are: ApplicationDevelopment and Management (ADM), Business Analytics,Contact Center (English), Contact Center (Multilingual),Engineering Services, Finance and Accounting (F&A), HR,Legal Services, Product Development, Research and Development(R&D) and Testing.In addition, we have also analyzed the way buyers ofservices (or client nations) look at offshore nations, and forthat purpose, we also have identified the Top 5 and the Next5 Offshore Nations. While the Top 5 are considered as matureor established outsourcing nations, the Next 5 are greatalternatives for specific types of processes and are seen asdestinations with considerable near-term potential. GSOctober 2009 www. globalservicesmedia.com GlobalServices 9
Page 1: globalservicesmedia.comThe gateway
Page 4 and 5: Special ReportThe gateway to the gl
Page 10: Special ReportThe gateway to the gl
Page 14 and 15: The Republic of the Philippines, an
Page 16 and 17: Global Services / www.globalservice
Page 20: Special ReportThe gateway to the gl
Page 23 and 24: The gateway to the global sourcing
Page 25 and 26: Delhi (NCR), IndiaThe gateway to th
Page 29 and 30: Chennai, IndiaThe gateway to the gl
Page 31 and 32: Pune, IndiaThe gateway to the globa
Page 35 and 36: MethodologyThe Global Services-Thol
Page 37 and 38: MONDAY, AUGUST 10, 2009Special Repo
Page 45 and 46: MONDAY, AUGUST 24, 2009Outsourcing

Top 50 Emerging Global Outsourcing Cities - Tholons

Create successful ePaper yourself

Delete template?

Save as template?