Thursday, January 3, 2008

Offshoring to grow 40% - Gartner

Gartner, in one of it's press releases, states that offshoring is going to grow more than 40% in 2008.

Gartner evaluated 30 countries on following parameters:
1. Language
2. Government support
3. Labour pool
4. Infrastructure
5. Educational system
6. Cost
7. Political and economic environment
8. Cultural compatibility
9. Global and legal maturity
10. Data and intellectual property security and privacy

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

Their region specific analysis says:
In Asia/Pacific, 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.

My take

Good news !!! atleast for an IT professional like me based in India. :)

Gartner also reports that offshoring is going to grow more than 60%. This will require services companies who can cater to non-english client's requirements. This is tricky and will pose challenge to India. My comment can be challenged because, there is quite a lot of work done by Indian MNCs in Europe.

I am not sure if China or Vietnam is going to be a real challenge to India with the such big English speaking population. Added to this, we have around 2 million engineering graduates getting added to the talent pool. Considering that only 20% is employable in IT, we still have enough talent available.

Having said that, the issues that are going to bite us back are:
1. Infrastructure
2. American economy slump
3. Sticking on to different flavors of same old operating model and methodologies
4. Attrition

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