Is India a risky offshoring location?

By : |May 31, 2009 0

NEW DELHI, INDIA: Yes, India is much sought-after destination when it comes to global outsourcing. But how safe is the country for those who outsource?

According to the latest edition of “The Black Book of Outsourcing”, India is one among the ‘riskiest’ places for outsourcing.

The list of 50 destination ranked according to safety has been divided into two – 25 safest cities and 25 riskiest. While none of the Indian cities have found place in the ‘safest 25’ list, there are eight Indian cities in the list of ‘riskiest 25’! And the risky aspects of the India cities include concerns like terrorism, pollution and geopolitical issues.

The dubious eight are the national capital region (comprising Delhi Gurgaon and Noida), Mumbai, Kolkata, Bangalore, Hyderabad, Chennai, Pune and Chandigarh.

 Among the eight Indian cities, the dubious distinction of being the riskiest goes to NCR region, which is ranked 45 in the list of 50. And the safest is Kolkata (26), followed by Hyderabad (27), Bangalore (28), Chennai (30), Pune (31), Chandigarh (36) and Mumbai (42).

India accounts for the maximum number of cities in the 25 riskiest places, while China has only one city, Dalian, among the 25 riskiest places at 12th place. On the other hand both China and Mexico have three cities each among the safest.

The ‘riskiest’ among the riskiest 25 Bogota (Columbia), followed by Bangkok in Thailand, Johanesburgh in South Africa, Kuala Lumpur in Malaysia and Kingston in Jamaica.

“The Black Book of Outsourcing”, brought out by US-based Brown-Wilson Group, ranks Singapore as the safest outsourcing location followed by Dublin (Ireland), Santiago (Chile), Krakow/Warsaw (Poland), Toronto/Montreal (Canada). While Beijing comes ninth, Cairo is at number 10 position in the list.

On the other hand, The Black Book says Indian outsourcers have regained strong buyer confidence by demonstrating tangible transparency, accountability and ethical management practices to 81 one per cent of US companies buying services offshore.

It also says that technology budgets will be fully restored or expanded over next twelve months, corroborated by 68 per cent of outsourcing buyers. As the economy improves, 60 per cent of clients anticipate shifting from less agile outsourcers that were unmovable through recession-related renegotiation issues, said a press release.

"Outsourcing’s cost argument still outweighs political issues in this survival economy," said Scott Wilson, author of "The Black Book of Outsourcing", and principal of Brown-Wilson Group, a Datamonitor company.

"Despite the pending policy changes in U.S. corporate tax code, high US and UK unemployment rates, and the recent offshore scandal at Satyam, the core drivers of outsourcing have remained intact," added Wilson commenting this year’s results.

The annual "State of Outsourcing Industry Report" contains Black Book’s Top 50 "Best Managed" Global Outsourcing Vendors, the unbiased, client experience rankings from 24,000 validated survey participants.

The poll marks its seventh consecutive year of collecting data on the industry. 2009’s Top Fifty Best Managed Outsourcers in rank order are: HCL, Oracle, Xerox, Infosys, Accenture, IBM Global, Ciber, Capgemini, Genpact, Hewlett Packard EDS, CSC, Cognizant , Intelligroup, IGATE, Patni, Perot Systems, Spherion, TechTeam, Acxiom, NIIT Technologies, Wipro, CPM Braxis, ACS, Sitel, CH2M Hill, Tata Consultancy Services, Syntel , Steria, Mastek, Clutch Group, Unisys, WNS, XChanging, Integreon, Pangea3, Neusoft, Innodata Isogen, EPAM, The Smart Cube, BNY Mellon, Teleperformance, Hewitt, Consero, Broadridge, NorthgateArinso, Neoris, Microland, Logica, Vengroff, Williams & Associates, and XEN Global.

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