India leading offshore services: Gartner

BANGALORE: India remains the undisputed leader in offshore services while countries like China, Russia and Brazil are providing credible alternatives, according to a Gartner study which also named 30 offshore locations.

Gartner analyzed the 30 countries to assess their suitability for offshore locations. Gartner predicts that in 2008 offshore spending to grow 60 per cent in Europe, and 40 per cent in the US.

In Asia-Pacific, China pose greatest challenge to India but fare poorly in language skills. China, India and Singapore demonstrate strong government support for the promotion of their country as an offshore services location.

Pakistan, the Philippines, Sri Lanka and Vietnam performed weakly due to concerns over the political and economic environment. Higher-cost locations like Australia, New Zealand and Singapore have the advantage of cultural compatibility, global and legal maturity, and data and intellectual property security and privacy.

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

Canada led the rating in seven of the ten categories. It fared worst for cost of labor but dominated the rating for language. Latin American countries are able to leverage their Spanish language skills increasingly in the US.

The region fared the worst in data and intellectual property security and privacy, and the infrastructure categories.

Locations like Ireland, Israel, Northern Ireland and South Africa in EMEA fared well for language skills. Others such as the Czech Republic, Slovakia, Hungary, Poland and Romania are credited for the availability of alternative languages that address the needs of an increasing number of continental European buyers.

Government support achieved low ratings in the region with the labor pool ratings also being a concern.

The region delivered the highest ratings when it came to infrastructure and educational systems.

Slovakia, Romania, Russia and Ukraine scored well on cost grounds. However, the whole cost profile of the EMEA region must be regularly evaluated, as salaries, real estate, communications and other costs are in a state of flux.

Few countries, except Russia, have a good selection of local service providers actively selling their capability outside their own country.

Gartner used language, government support, labor pool, infrastructure, educational system, cost, political and economic environment, cultural compatibility, global and legal maturity, and data and intellectual property security and privacy as the criteria to consider the offshore locations.

Gartner also assessed another 35 countries who were unable to make it to the top 30 list.

Gartner’s top 30 locations for offshore services by region

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