Destination Compendium 2010

Global ServiceS A CYBERMEDIA PuBlICAtIonAn integrated media platform which connects thevarious constituents of the global technology and Pradeep Gupta Chairman & Managing Director business processing services industry ecosystem. Cyber Media (India) Ltd. E. Abraham MathewDirectory of ServiceS President Ed nairNewSletter EditorA regular digest of key industry happenings. ed@cybermedia.co.in Satish GuptaDiGital MaGaziNe Associate Vice PresidentThe fortnightly digital magazine features research satishg@cybermedia.co.inreports, articles and experts’ views. Available on Smriti Sharmawww.globalservicesmedia.com smritis@cybermedia.co.in Sruthi RamakrishnanwebiNarS sruthir@cybermedia.co.inGlobal Services’ web-based seminars aim to impart niketa Chauhanuseful information related to outsourcing indus- niketac@cybermedia.co.intry in the form of presentations and discussions Virendra Kumarby industry specialists. virendrap@cybermedia.co.inreSearch offICESWe deliver indepth analysis and research reports Global Services Media llC.on sourcing subjects. 806 Green Hollow Drive, Iselin, NJ 08830 T: 678-665-6005MicroSiteS Global ServicesOnline resource center designed to provide Cyber Media (India) Ltd.focused content on special subjects to the out- CyberHouse, B- 35, Sector 32sourcing community. Gurgaon-122001, India Tel: +911 24 4822222eveNtS Fax: +911 24 2380694 Contact:From multi-day, high-level, resort conferences to globalservices@cybermedia.co.inintimate breakfast discussions we offer a numberof opportunities that connects the outsourcing Disclaimercommunity. All rights reserved. No part of this publication may be reproduced by any means without prior written permission from the publisher.cUStoM ProGraMCustomized services rendered through different letterS to the eDitormedia platforms. Send letters to ed@cybermedia.co.in, or to any of our writers. We reserve the right to editoSoUrce booK all letters. Postings submitted to our blogs andA directory of global outsourcing service providers. letters to the editor may be published in ourwww.osourcebook.com digital magazine or Website.

Global Services LIVE! is a quarterly compendium that features success stories in the globalsourcing and delivery of IT and BPO services to businesses worldwide. The compendiumfeatures live cases that offer live lessons to the sourcing world. Service providers thatparticipate in the program stand to benefit in terms of being able to showcase their bestcapabilities, leverage and reuse existing marketing assets, and reach their target marketeffectively. The program helps buyers of services identify service providers with demon-strated capabilities, skills, delivery profiles and industry domain knowledge. 2010 – Q4 Edition 2011 – Q1 Edition 2011 – Q2 Edition 2011 – Q3 EditionThe program is delivered in multiple formats such as Digital Magazine, PDF, Microsite, Onlinerepository, e-newsletter, social media to name a few. Power Of Customer Advocacy! For more details Click Here To be a part of this program, write to satishg@cybermedia.co.in

EDitor’s NotE The Business of Places B usiness is all about ideas, money, and people. And places. This is specifically true in the global services industry. As we end this decade that marked the maturing of global sourcing of services, the role of outsourcing locations has really played out very well for all of us to see. For one, global sourcing was always about the Ed Nair ‘place’. In the beginning, it meant India and now it means much more. The journey from thereon has been fascinating. Editor Remarkably, the journey also coincided with many other con- ed@cybermedia.co.in comitant trends like rapid globalization, liberalization of economies, growth in emerging economies, and technology refresh cycles. These trends spurred the growth of global locations from where services IT and BPO are could be delivered. both global business The other point is that services in the form of IT and BPO are both global business opportunities and tools for economic development for opportunities and countries. The breadth of economic impact of pursuing global services tools for economic is wide: it includes increase in FDI, growth in exports, increase in development for domestic employment, rise in purchasing power, infrastructure development, and overall GDP growth. Every country including India is countries. This year’s witness to these effects. research and ranking The Global Services Destinations Compendium is an attempt to feature 100 cities bring together the myriad dynamics of outsourcing locations in one place— complete with research, data, profiles, and expert opinions. At from 49 countries. the most granular level, we look at cities and how they compare with each other. More importantly, we look at how upwardly dynamic the cities are compared to previous years. The research and ranking from Tholons feature 100 cities from 49 countries. It is indicative of the phenomenal spread of the global services business. GS6 GS Destinations Compendium 2010 www.globalservicesmedia.com

A T R U E P U B L I C P R I V AT E PA R T N E R S H I P W o r l d ’s # 9 Fa vo ra b l e Outsourcing Destination “A.T. Kearney Report 2009”Reliable Infrastructure Educated Technical Human ResourcesYour Gateway to the Middle East Fast Growing Economy

coNteNtS11 49 ExPERT SPEAkThe Top 100 CiTies � Choosing the Rightby Avinash Vashistha &Manuel Ravago, TholonsThe list of Top 100 Outsourcing Cities will set the outlook for the Off-Shoring Destination 50industry in coming years. by Atul Vashistha, Founder & Chairman, Neo Advisory � Compete or Cooperate? Bridging the Nearshore- Offshore Divide 53 by Anupam Govil, Founder and CEO, Global Equations � Rise of IT-BPO Outsourcing Frontiers Regional Analysis 56 by Viral Thakker and Nishant Mathur, KPMG Advisory Services, India � Latin America: The Next Sourcing Frontier or an Afterthought? 59 by Esteban Herrera, Senior Vice President, HfS Research � Africa: The emerging frontier for services21 JORDAN offshoring 63COUNTRy IN by H.Karthik and Nikhil Rajpal, Everest GroupFOCUS: JORDAN � Location Selection Best Practices 65 by Jehil Thakkar and Shailesh Narwaiye, KPMG27 Advisory Services, IndiaREGIONAL DyNAMICS � Global Sourcing for FAO: Strong, Successful andby Sruthi Ramakrishnan Growing 68 by Stan Lepeak, Managing Director, EquaTerra Global� Location Assessment: Perception and ResearchReality for Global Businesses 28 � Why Latin America is Still a BUy 71� Europe: Showcasing the by Mario Tucci, Senior Global Business ConsultantChallenges and Opportunities 32 � Africa- The Next Outsourcing Frontier 72� Perspectives and by Dr. P.K.Mukherji, President & Managing Partner,Potential of Asia’s Avasant AsiaHotspots 36 � Latin America Emerges as a key Outsourcing� Middle East & Africa: Destination for 2011 74Leveraging Africa & by Don Jones, Partner, Technology & Life SciencesMiddle East 41 Practice, BDO USA� Latin America: The � Africa as an Outsourcing Destination 76Enduring Promise of by Pumela Salela, BPO/ITeS expert Consultant, World BankLatin America 44 � Offshoring in the Latin American Region 82 by Pradeep Udhas, Executive Director, IT/ITeS Sector, KPMG8 GS Destinations Compendium 2010 www.globalservicesmedia.com

� India’s Global Expansion: Eyeing LatinAmerica 83by Sumeet Chugani, Associate Attorney, Diaz Reus & Targ� Legatum Prosperity Index 8487 � Dalian 104 � Guangzhou 106 � Santiago 128 � Shenzhen 130CITy PROFILES � Hanoi 107 � Singapore 132� Beijing 88 � Ho Chi Minh 109 � St. Petersburg 133� Belfast 90 � Johannesburg 111 � Toronto 134� Brno 91 � kolkata 113 � Warsaw 136� Budapest 92 � krakow 115 � Ahmedabad,� Buenos Aires 96 � kuala Lumpur 117 Bangkok, Bhubaneswar, Brasília 137� Cairo 98 � Mexico City 119 � Bucharest, Cape Town, Dubai, Glasgow City 138� Chandigarh 98 � Prague 120 � Guadalajara, Istanbul, Jakarta, kyiv 139� Coimbatore 100 � Rio de Janeiro 122 � Montevideo, Moscow, Mysore, Nizhniy� Colombo 101 Novgorod 140 � San José 124� Curitiba 103 � Penang, Perth, Seoul, Taipei 141 � Sao Paolo 126 Destinations Compendium 2011 One Stop Resource On Global Outsourcing Destinations RELEASING NOVEMBER 2011 Inviting countries, cities, associations to take part in this initiative For more details, write to satishg@cybermedia.co.in9 GS Destinations Compendium 2010 www.globalservicesmedia.com

� Ranking fluctuation 12� Methodology and Scope of Study 15 by� Point of Scale Resistance 15 Avinash Vashistha� The top 100 Cities 16 Chairman and CEo, Tholons� top 10 Emerged Cities 18 Manuel Ravago� top 10 Emerging Cities 19 Research Director, Tholons

the top 100 citiesRanking Fluctuationsthe 2010 List of top 100 outsourcing Cities is a deliberate attempt toencapsulate trends in the new era of services globalization.Boon or Bane? likewise provides insight to the future potential of locationsChange has been the best descriptive word for the out- in addressing emerging trends and demands in servicessourcing industry in 2009, and this year, Tholons has globalization.encompassed the world’s Top 100 Outsourcing cities -twice the number of previous Lists. The expansion of the Location Assessment Frameworklist has created an avenue for a more concise understand- These recent events in the global economy certainly high-ing of industry movements – across 49 countries from 10 lighted the importance of more accurately assessing a loca-defined regions. tion and the corresponding outsourced services that can be Industry experts noted that the outsourcing activities potentially delivered. Given this, the Location Assessmentfrom 2009 to this year have become sluggish. Countries Framework has been applied in generating this report. Thetried their best to prove resiliency in the crisis and opted Framework covers six broad categories with fifteen subcat-for strategies that could mitigate the effects. Indeed, some egories, with each category and subcategory having theirof the countries that had been resilient experienced smaller own respective weight. These weights are then utilized toGDP growth, below expected growth targets; on the other generate a corresponding ‘City Score.’ These categories arehand, countries which were greatly affected by the global “Scale and Quality of Workforce”, “Business Catalyst”,recession posted negative growth, which often deterred “Cost”, “Infrastructure”, “Risk Profile” and “Quality oftheir development as service delivery locations. Life”. Likewise, the repercussions of the global economic The parameters above are the essential components incrisis postponed many large outsourcing deals across geog- differentiating cities from each other. Consequently, theraphies, while forcing service buyers and providers alike to parameters serve as guide in determining the capabilitiesstretch operational budgets. The mantra of ‘doing more for of each city to deliver services in the wider spectrum of theless’ has never been more relevant to the service providers outsourcing industry. Aside from presenting the inherentas it was this past year. The effects of the downturn also strengths, the parameters are also an effective base for iden-spurred apprehension among clients in renewing outsourc- tifying the inhibitors or areas for improvement which maying contracts. This cautionary stance was felt by most if undermine the development of the industry in the loca-not all horizontal and vertical segments of the industry. tion. The framework also reveals additional factors which On a positive note, many have viewed these challenges may spur a location’s service delivery maturity.as opportunities, treating the economic downturn simply The combination of these parameters results in a specif-as a transitionary (or even evolutionary) phase for the ic correlation of the cities to their respective service niche.industry. There is now a greater call for delivering complex For example, considerations in the workforce extend fromservices than maintaining cost advantages, which leads to scalability to employability of workforce. Cities with ana more widespread transformation of outsourcing models abundance of Spanish-proficient speakers will have ato fit the requirements of an ever-changing buyer market. greater value proposition for catering voice-based BPOFurther, there is a stronger focus on business transforma- services to the US Hispanic market. Likewise, cities withtions among service providers, which will foster enhanced high percentage of engineering graduates may be bettercustomer satisfaction. In the end, stronger buyer-provider equipped to venture into the ESO space.relationship will be seen. Cost still plays a significant factor in locating. Coupled The 2010 List of Top 100 Outsourcing Cities is a with the capacity to deliver specialized services, low costdeliberate attempt to encapsulate such trends in this new cities can have a definitive advantage in attracting inves-era of services globalization. Thus, this year’s List is not tors or service providers. Along with this, developed andonly a reflection of the current competitiveness (and stat- supportive ITeS infrastructure is needed in order to fulfillure) of cities in the global outsourcing landscape, the List the requirements of the industry. In order to support the12 GS Destinations Compendium 2010 www.globalservicesmedia.com

the top 100 cities Scale & Quality Cost Businee Catalyst Infrastructure Risk Profile Quality of Life • Labor Pool • Cost of Operations • Government • Connectivity • Social infrastructure • Commerical Risk • Skills Availability • Cost of Training Benfits/Incentives • Bandwidth Availability (Hospitals, Educations • Political Risk • Graduate Output • Cost of Real Estate • Competitive • Transportation Institutions, etc.) • Natural Risk • Complexity • cost of Bandwidth Landscape • Non-work Culture • Social Risk • Cost of Living • Untapped Labor Pool • Availability of • Cost of other • Employement Profile Recreation/Leisure Infrastucture facilities Skills and Savings Business operational Business non-Business Scalability Environment Environment Risk Environmentgrowing ITeS industry, kuala Lumpur for example, has improvement in perceived risk in the country by the cli-shown concerted effort in improving infrastructure, which ent nations. The city of kuala Lumpur moves up 4 placescontributes to its overall attractiveness as an outsourcing highlighting the city’s robust and continuously developingdestination. infrastructure and maturity of service delivery capabilities Factors such as Risk Profile and the Quality of Life in for high-value ITO and FAO.the cities are also included to assess the viability of the On the other hand, the major drops were seen in Tierlocation. Political violence and social unrest may greatly II locations: Nizhny Novgorod, Thiruvananthapuram,affect the conduciveness of business operations in the city. Cordoba, Chandigarh, Belfast, Accra, and Jaipur. OneOne recent example is the increasing crime rate in Mexico, possible reason is the inability of Tier II locations towhich has definitively affected the decisions of service pro- improve on service delivery maturity, in relation to its Tierviders in locating and expanding in the country. I competitors in their respective countries. The two-old The Framework also considers various regional dynam- factors can be attributed to this: quality of scalable laborics which also have a direct influence on the positioning of pool and infrastructure concerns.the cities in the global outsourcing space. Latin America Many Tier II locations likewise have struggled tois reputed for its nearshore advantages to the US; on the develop labor pools, or to at least reach the same labor poolother hand Eastern Europe is known for its cultural affinity quality of Tier I locations. Many Tier II locations haveand geographic proximity to the Western European client also experienced labor migrations of their highly-skilledmarket. resources, and as induced by rising unemployment rates. The Tholons Location Assessment Framework thus Challenges pertaining to employability have also been anbecomes more relevant in critically identifying, monitor- occurring problem in many Tier II cities – especially whening, and evaluating the competencies of emerging global considering English proficiency and technical skills. Foroutsourcing destinations. example, the city of Jaipur in India has lost some of its appeal as a destination of choice due to the perception ofCity Movements: Losers and Gainers low employability of its technical and managerial talentThe top gainers this year were mostly Tier I destinations pool. In contrast, and in St. Petersburg in Russia, the high– Colombo, kuala Lumpur, Singapore, Brasilia, and technical graduate output is one of the major contributingMontevideo. A clear factor for the movement is attributed factors which moved its ranking up, albeit having highto the global effects of the economic crisis. With most labor costs.economies recovering and rebuilding their competencies, Weak infrastructure support also remains a deterrentservice providers have been more keen on strategically for service providers from locating in Tier II cities. Forplacing their investments in (safer) Tier I cities and in instance, India’s ITeS-related infrastructure is nearing peaklocations with established service delivery capabilities. capacities, which makes it less efficient in fulfilling theFor instance, the city of Colombo moves up 5 places this requirements of the industry. This is noticeable amongyear, in recognition of its capabilities in FAO, producing Tier-I locations in India and is further observed amongaccountants that meet Uk standards and the significant Tier II locations.13 GS Destinations Compendium 2010 www.globalservicesmedia.com

the top 100 cities Movement Major Gainers Movement Major Losers Education, or Application Development Management +6 St. Petersburg -4 Nizhniy Novgorod services from its cities. Thus, the country value proposition +5 Colombo -4 Thiruvananthapuram is merely a rough summation of the service capabilities of +5 Singapore -4 Belfast its key outsourcing cities. +5 Brasilia -5 Cordoba City-centric assessments also receive greater traction from large service providers, and as city’s can better +5 Montevideo -5 Chandigarh decouple themselves from the broad or oftentimes ‘generic +4 Kuala Lumpur -5 Jaipur proposition’ of the country. Value propositions of the cities +4 Brno -5 Accra are oftentimes overshadowed by the generic country value +4 Tianjin proposition. Cebu City for example has high potential to become a global kPO player but the city’s image isThe downturn has proven the importance of location often overshadowed by the Philippines’ voice-based BPOassessment for investigating the service delivery maturities reputation.of outsourcing destinations. Factors for locating may not For Tier II cities, decoupling will become an increas-entirely rest on the cost advantages but on the quality and ingly necessary process, especially among emerging citiescomplexity of services being delivered. Service providers with very specific skill set propositions. Decoupling fromhave been keen in evaluating the best-fit city which will the country image will entail an efficient highlighting ofdeliver their processes. the local value propositions and a more focused marketing Thus, the challenge now lies for the emerging countries and promotions strategy.to increase its overall competitiveness to gain traction in The underlying premise for decoupling still lies on thethe outsourcing landscape. This will require more effective coordination among key stakeholders in the particularand creative initiatives that will position better position location. More responsive decision and implementationtheir countries in the market and highlight their inherent will be required as the city-centric approach is significantlyservice delivery advantages. smaller compared to country-level approach. Successful concerted effort will also be a crucial factor in identifyingCity-centric Approach – The Continuation of and building the outsourcing industry in the city.the Paradigm Shift The revamp of the global economy marks the emer-City-level analysis has always been the best approach in gence of key trends in outsourcing – a paradigm shiftidentifying corresponding service delivery strengths. As encompassing the types of services and the geographies ofcompared to country-wide analysis, a city-centric approach ideal locations. In the near-term, we should experience aallows a more granular investigation of the inherent capa- more granular approach to location assessment - focusingbilities of and the opportunities for each potential city. on cities rather than countries and as a city-centricFor example, a country having specialization in IT services approach fosters better identification of specific nichemay encompass Software Development, IT Training and services. GS 27 January, New York “Other outsourcing conferences do not have a good mix of Buyers and Sellers. Most of the time it is lot of sellers. So I think, it’s a good mix, you get to hear from the buyers prospective which is very important” . -Global Services Conference 2010 Attendee Know More14 GS Destinations Compendium 2010 www.globalservicesmedia.com

the top 100 citiesMethodology and Scope of Studyt he Top 100 Emerging Outsourcing Destinations governments, trade bodies, and global institutions, while 2010 report was fulfilled through a combina- government publicly released data were used to present tion of proven methodologies. First, surveys and country macroeconomic data, while market assumptions interviews were conducted with Tier I & II and analyses were grounded by data such as annual reports,service providers and buyers aimed at determining trends industry bulletins, and trade publications. In generatingin delivery and consumption of outsourced services in the rankings in the report, a combination of qualitativespecific destinations as well as determining market and and quantitative analyses, developed and refined by seniorlabor sizes, identifying the expansion strategies of Tier I & consultants, considering numerous variables in providingII service providers. Second, secondary research was con- the rankings and evaluating the impact of non-numericalducted in support of primary means. Country economic data on the assessment of outsourcing locations wereinformation were gathered from historical data from employed. GSPoint of Scale ResistanceSMt he current global outsourcing landscape is amount of investments flowing into the sector. It can marked with by heightened competition with also be seen in aspirations (or intent) of students to service delivery locations aiming at securing take education related to specific outsourcing service their respective shares of the global outsourc- lines.ing market. One major challenge for these locations is ❑ low Employability: Employability is a factor of qual-how to better integrate their respective labor pools in the ity of education, quality of institutions and availabilityoutsourcing sector as service providers most often choose of industry-relevant skill sets of a given labor pool.locations on the basis of accessibility of qualified talent ❑ High Competition: Competition is a significant fac-in the long-term. With this shift of paradigm from basic tor for scalability as it can come from not only theavailability to sustainable and employable talent supply, services outsourcing industry but also from otherthe concept of Point of Scale Resistance (POSR) has been industries hiring from the same pool.introduced in analyzing service delivery locations. This ❑ High Risk: The perception of risk can vary across theconcept refers to the point beyond which organizations stakeholders in the industry, and hence high risk loca-will encounter challenges in ramping up operations in a tions (at times with excellent talent pool availability)specific location – highlighting sustainable employability fail to provide scalable solutions.of talent. For instance, if Country A has a POSR of 850, ❑ financial feasibility: While focus has remained onthis means that service providers would theoretically cost and operational benefits, high salary inflationencounter difficulties in ramping-up headcount beyond inhibits scalability.850 employees. This clearly suggests that scalability is afunction of multiple parameters and not just population, The POSR concept will become an increasingly importantand the inhibitors have been classified into the following consideration for emerging delivery locations to promotesegments: their capabilities as it assists in identifying what a location❑ low Demand: Demand can be seen not just in the can/cannot or should not do when assessing its service deliv- number of MNCs present in the country to the ery capabilities. GS15 GS Destinations Compendium 2010 www.globalservicesmedia.com

the top 100 cities The Top 100 CiTies 2007 2008 2009 2010 City 2007 2008 2009 2010 City Top5 Top8 Top8 1 Bangalore 25 20 19 28 Johannesburg Top5 Top8 Top8 2 Mumbai - 22 23 29 Toronto Top5 Top8 Top8 3 Delhi (NCR) - 26 21 30 Rio de Janeiro Top5 Top8 Top8 4 Manila (NCR) 32 33 27 31 Kuala Lumpur 1 Top8 Top8 5 Chennai 21 17 18 32 Coimbatore 2 Top8 Top8 6 Hyderabad 33 32 31 33 St. Petersburg Top5 Top8 Top8 7 Dublin 27 29 30 34 Brno 3 Top8 Top8 8 Pune 22 23 24 35 Guangzhou (Canton) 4 1 1 9 Cebu City - 30 26 36 Mexico City 8 2 2 10 Shanghai 24 24 25 37 Belfast 16 5 4 11 Kraków 26 28 28 38 Warsaw 10 3 3 12 Beijing - 36 36 39 Singapore 14 9 6 13 Buenos Aires - 37 33 40 Chengdu 11 7 7 14 Cairo - 31 29 41 Jaipur 15 8 8 15 São Paulo 46 41 37 42 Monterrey 6 4 5 16 Ho Chi Minh City 43 38 34 43 Bucharest 18 16 12 17 Dalian (Dairen) 44 43 41 44 Brasília 13 10 9 18 Shenzhen 34 34 32 45 Accra 17 13 11 19 Curitiba 42 39 38 46 Moscow 7 19 17 20 Colombo - - 43 47 Tianjin 12 11 10 21 Hanoi - 44 39 48 Guadalajara 20 14 14 22 Prague 40 35 35 49 Bratislava 5 6 15 23 Kolkata - - 47 50 Montevideo 19 18 16 24 Santiago 41 40 40 51 Sofia 29 27 20 25 San José 47 46 46 52 Tallinn 9 12 13 26 Chandigarh 35 48 45 53 Halifax 28 25 22 27 Budapest 49 50 49 54 Ljubljana16 GS Destinations Compendium 2010 www.globalservicesmedia.com

the top 100 cities 2007 2008 2009 2010 City 2007 2008 2009 2010 City Casablanca - - - 79 Penang - - 44 55 (Dar-el-Beida) - - - 80 Seoul 48 49 50 56 Kyiv 31 - - 81 Perth - - 48 57 Alexandria - - - 82 Bucaramanga - - - 58 Bhubaneswar - - - 83 Asunción 30 42 42 59 Glasgow City - - - 84 Wroclaw - - - 60 Istanbul - - - 85 Amman - - - 61 Cork Birmingham, 38 - - 86 - - - 62 Jakarta Alabama - - - 63 Nizhniy Novgorod - - - 87 St. Louis, Missouri - - - 64 Bogotá Santa Rosa, - - - 88 Laguna (or Metro - - - 65 San Juan Laguna) - - - 66 Lima - - - 89 Valparaíso - - - 67 Thiruvananthapuram - - - 90 Port Louis - - - 68 Medellin - - - 91 Mysore - - - 69 Davao City Indianapolis, - - - 92 - - - 70 Xi’an Indiana - - - 71 Córdoba - - - 93 Dubai - - - 72 Ahmedabad Oklahoma City, 45 - - 94 Oklahoma - - - 73 Cape Town - - - 95 Belgrade - - - 74 Taipei - - - 96 Campinas - - - 75 Recife - - - 97 Novosibirsk 39 47 - 76 San Antonio, Texas - - - 98 Iloilo City - - - 77 Bangkok - - - 99 Tunis Leeds (Yorkshire & 37 - - 78 Humber) - - - 100 Bacolod CityStatuS 2010 ESTABLISHED EMERGING ASPIRING17 GS Destinations Compendium 2010 www.globalservicesmedia.com

the top 100 citiesTop 10emergedCiTiest his year’s list of Top Emerged Outsourcing Pune, considered as the educational hub producing Cities has expanded, identifying ten global quality labor pool in ESO and ADM remains at 8th place delivery locations. Two new cities join the this year as it faces stiff competition from other emerged eight previously acclaimed outsourcing cities. Indian cities.Cebu City and Shanghai have significantly developed their Cebu City has been successful in further developingrespective outsourcing industries which have allowed these its outsourcing capabilities. An established English voice-cities to join the Top 10 Emerged List. based processes sector supports its 9th place rank. Bangalore retains first place for the 4th year running, Shanghai has developed complex IT and R&D services,setting an example through its high talent output, and optimizing its labor pool, cost advantages, and transportestablished and expanding service delivery capabilities. linkages, rounding of the Top 10 list this year. GS Mumbai moves up to 2nd place this year, with its hugelabor pool consistently displaying enhanced service deliv- Rank 2010 Rank 2009 City Countryery in complex and high-value FAO services. Delhi NCR moves down to 3rd place this year, owing 1 1 Bangalore Indiato rising real estate costs and infrastructure stress on Delhi 2 3 Mumbai IndiaCity, and despite its established FAO sector. Manila NCR stays at 4th place as it encounters chal- 3 2 Delhi (NCR) Indialenges in moving up the value chain towards kPO services, 4 4 Manila (NCR) Philippinesgiven its mature service delivery in voice Contact Support& FAO. 5 6 Chennai India Chennai moves up to 5th place due to its access to the 6 7 Hyderabad Indialarge technical talent pool from Southern India and itsmaturing service delivery capabilities. 7 5 Dublin Ireland known as the IT hub of India, Hyderabad moves up to 8 8 Pune India6th place owing to its mature service delivery capability andlarge pool of engineering and technical graduates. 9 - Cebu City Philippines Despite its mature delivery capability in R&D and IT 10 - Shanghai Chinaservices, Dublin constantly faces high costs and limitedscalable labor – the city slips to 7th place this year.18 GS Destinations Compendium 2010 www.globalservicesmedia.com

the top 100 cities Top 10 emerging CiTiest he list of Top 10 Emerging Cities will set the Vietnam’s Ho Chi Minh, an ITO-centric city, has outlook for the industry in the coming years. significantly dropped three places due to scalability and With cities coming from South America and employability of its labor pool and as service providers in MENA regions, it is compelling to see stiffer the city have begun to experience scale-up issues.competition arising from these locations in order to cap- Leaping 3 places, Dalian is one of the impressiveture a significant share of the global outsourcing market. emerging outsourcing cities this year. The city experiencedEach city in the list has been positioning itself and their an estimated 30 percent increase in software and servicesrespective niche services and specific target markets - lead- outsourcing exports last year. Dalian has remained success-ing to more defined value propositions per city. ful in targeting the Japanese and South korean markets for The only Eastern European city, krakow leads the Top ITO and kPO services.10 Emerging Outsourcing Cities List. The city has been Shenzhen moved one rank lower this year due to lowerconstantly moving up the ranks since 2008. The city has annual graduate output coupled with challenges in creat-built expertise in delivering FAO services with improving ing conducive business environment for investors.service delivery maturity for ITO and HRO services. Large Curitiba takes ninth place this year. The city gov-multinational companies have established their presence in ernment has embarked various initiatives like Curitibathe city, like Capgemini, Google, IBM and Microsoft. Offshore Center to promote the city as a prime ITO hub Beijing is second in the list of Emerging Cities. The in Brazil.city’s primary strength is its enormous scale and talented Sri Lanka’s chief outsourcing city, Colombo, closes thelabor for ITO services. In fact, the ITO sector has already Top 10 Emerging Cities List. A significant factor for itscaptured 80 percent of the total outsourcing revenues of inclusion is th e recognition of its capabilities for deliveringthe city. However, Beijing continually faces challenges FAO services, together with the improvement of the per-improving its business climate as it remains affected by ceived business and political risk. GSstrict government regulations. Buenos Aires, the primary outsourcing city of Argentina, Rank 2010 Rank 2009 City Countryalso moved one place higher in this year’s rankings. Thecity has been harnessing its capabilities in delivering mul- 1 4 Krakow Polandtilingual Contact Support Services to key markets. This 2 3 Beijing Chinaspecialization contributes to the improving service deliverymaturity of the city. 3 6 Buenos Aires Argentina A notable outsourcing city of the MENA region, Cairo 4 7 Cairo Egyptmoved to fourth place this year. The fusion of nearshoreadvantage to Europe and multilingual skills of the people, 5 8 Sao Paolo Brazilpositions the city in delivering quality voice-based services 6 5 Ho Chi Minh City Vietnamto European and Arabic markets. Sao Paulo continues to move up the rankings, being the 7 12 Dalian Chinabanner high-value ITO city of Brazil. With still an under- 8 9 Shenzhen Chinautilized pool capable of fulfilling R&D and Engineeringservices, Sao Paulo is poised for better positioning in high- 9 11 Curitiba Brazilvalue services in the coming years. 10 17 Colombo Sri Lanka19 GS Destinations Compendium 2010 www.globalservicesmedia.com

COUNTRY-IN-FOCUS Ensuring Global Visibility A special feature for countries to showcase their uniqueness There are numerous outsourcing destinations that exist as great alternatives to India and China. Inviting Countries to showcase capabilities that accentuate their uniqueness.Examples of Country-in-focus feature Egypt Philippines Jordan JORDAN For more information write to satishg@cybermedia.co.in

JORDAN

Advertorial Interview of Country Representative Stable Costs and High Quality of Talent Pool is Jordan’s Primary Value PropositionHow is the Jordan economy growingpresently, and what are the projections forthe immediate future?Jordan has focused on creating a globallyintegrated economy that is knowledge-centric. Over the past two decades, prudentfiscal and monetary policies have helped inmaintaining low inflation rates in the range of3-5 percent and a stable currency. Exports inthe country increased from USD 4.3 billion in2005 to nearly USD 6.3 billion in 2009. His Excellency Marwan Juma Mr. Aiman Mazahreh Minister of Information & Chairman-Int@j Communications TechnologyExternal debt during the period decreased Jordan is fast emerging as a destination offrom 56 to 21.7 percent. Gross official reservesat the end of 2009 stood at USD 10.8 billion.Jordan has adopted aggressive and choice for outsourcing.comprehensive development processes withactive participation from the private sector to the economy, and produce14,928 direct Together with attractive incentives,which are targeted at creating an investment- jobs. Exports have increased with an average investor-friendly policies and excellentfriendly climate in the country. Many of 343 percent in comparison to 2007, while infrastructure, Jordan has everythingbusinesses are finding Jordan to be one of the investments increased by 164 percent. The required for a smart outsourcingmost liberal and business-friendly economies industry is expected to grow to USD 250 destination. Jordan’s progressivein the region. million over the next three years, creating government has also recently launched a over 10,000 jobs. The outsourcing sector is new Development Zone strategy, further supported by Jordan being one of encompassing multiple specialized zonesHow did the outsourcing industry evolve in the initial countries in the region to establish at specific industries such as outsourcing.Jordan and what is the expected growth in a chapter of the International Association of These development zones offer aggressivethe industry? Outsourcing Professionals (IAOP). This financial incentives to complement existingJordan, as an outsourcing destination, started reflects on the growth of the country as an economic advantages of operating ingaining prominence a decade ago. Key outsourcing destination and provides an Jordan.potentials for the growth of the industry such extremely conducive environment foras a qualified workforce, competitive cost service providers and shared services What are the infrastructurestructures, a near-shore location and a organizations. requirements of the industry and howconvenient time zone were identified early well does the country meet theseon. Strong government backing was provided What are the key factors that contribute requirements?with world-class infrastructure, dedicated into making the country an outsourcingbusiness parks and a liberal economic Jordan has one of the most open destination of choice?environment. Today Information and telecommunication markets in the MiddleCommunication Technology (ICT) and Jordan’s primary value proposition lies in its East which is overseen by an independentInformation Technology Enabled Services stable costs, and the high quality of its talent regulator. Jordan is connected to the(ITES) industry both contribute 14.3 percent pool that is sustainable in the long-term. international network through various fiber ...continued http://www.intaj.net/outsourcing

Advertorial Interview of Country Representative...continued from previous pageoptic links, in addition to satellite connectivity government taking to ensure quality of by integrating technology in theand terrestrial links with neighboring talent and how are you ensuring classrooms. Intel Teach Initiative has beencountries using modern fiber optic cable scalability of the available talent? introduced as a worldwide program thatnetworks. Jordan has three main submarine focuses on using computer technology as acables that provide reliable international Jordan has a young population with nearly powerful teaching tool and enhances theconnectivity. In addition, Damamax is part of 70 percent under the age of 30. Jordan has creativity levels of both teachers andthe Hong Kong Telecom Group PCCW’s Global one of the most successful education students. An MoU was signed betweenNetwork, providing MPLS connectivity to systems in the region with a literacy rate of Microsoft and the Ministry of Education inmore than 1,000 cities worldwide at very 92 percent. The country is ranked first in the 2003 that focuses on creating ancompetitive prices. Middle East by the World Bank in terms of Innovative Teachers Network (ITN), a educational reforms. The government School Technology Innovation CenterThe country has developed dedicated spends 20.6 percent of its public (STIC) and an Education Support Center.business parks within the Development expenditure on the educational system.Zones to nurture the growth of its priority English is being taught at an early age in all The government is providing computersectors, such as ICT and BPO. These business schools, and modern technologies and labs in all public schools and universities asparks offer plug-and-play office space, methods have been introduced in the part of its comprehensive e-learningconnectivity and services to local and educational system to ensure technology program. A country-wide broadbandinternational firms and a streamlined process proficiency. network connecting all public schools,of setting up operations. universities, community access centers and There are a number of public-private community colleges is also being initiatives that are focused on creating a deployed.People are a key asset in this industry. knowledge-based economy in the countryWhat measures are the industry and the http://www.intaj.net/outsourcing

Outsourcing Oasis of the Middle East Advertorial The Jordan FactfileJordan, located where Africa, Asia and Europe converge, is ideally positioned asan investment gateway to the Middle East.The country’s robust economy, huge talent pool of human capital, temperate climate, convenienttime-zone, state-of-the-art infrastructure and the ongoing economic liberalization proceduresmake it one of the most preferred destinations for outsourcing firms. Jordan’s immense humancapital is one of the main drivers of growth in the region. A workforce, widely regarded as one ofthe most competitive and qualified in the region, has contributed to Jordan being ranked ninth inthe 2009 Global Service Location Index (GSLI) by analyst firm AT Kearney. Strong work ethics andlow attrition rates work in Jordan’s favor. Jordan invests more than 20.4 percent of its GDP oneducation and has more than 200,000 upcoming graduates to meet the demands of the fastgrowing outsourcing industry.Jordan possesses world-class infrastructure in terms of Internet connectivity, telecommunicationsnetwork as well as transport accessibility within the country and to international destinations.Dedicated business parks which boast of international standards of connectivity and services havebeen set up in Amman and Irbid to nurture the growth of the BPO industry in the country. Theseparks offer a streamlined regulatory environment and various tax benefits, coupled with high-endhousing and associated facilities to attract and retain further investment in the outsourcing sector.Jordan enjoys strong government support and reliable telecom connectivity through variousinternational submarine cables for its ICT sector. This has made it the fastest growing sector in theJordanian economy with an annual average growth rate of 25 percent. The ideal location of thecountry, investment-friendly economic climate and competitive rates contribute to the steady riseof Jordan as a preferred outsourcing location.at a glanceCurrency: Jordanian Dinar Countries that outsource business to Jordan: Gulf Cooperation Council (GCC) countries, US, UK, Middle EastMain industries: Tourism, Banking & Financial Services, and North Africa (MENA) regionEngineering Services, Healthcare & Pharmaceuticals, Energy &Renewable Energy, Information & Communications Technology Key verticals: Healthcare, Banking, Insurance, Telecom, Hospitality, TechnologyLiteracy rate: 92% Key services: Business Process Outsourcing,Languages spoken: Arabic (official), English, French, German, Information Technology Outsourcing, Knowledge ProcessArmenian, Spanish Outsourcing, Shared Service Centers and contact centersInternational airport: Amman (2), Aqaba Some big players: Hewlett-Packard (HP), Dell Perot Systems, CISCO TAC, CrysTelCall, Extensya, Aspire Services, Microsoft, OracleGDP growth (World Bank): 2.8% (2009) Key competitive advantages: Robust Economy, Strategic Location thGlobal ranking: 9 in the 2009 Global Service Location and Convenient Time Zone, Immense Human Capital Resources,Index by analyst firm AT Kearney Investor-friendly Economic EnvironmentQuick look at the IT-BPO sector growth Main cities: Amman, IrbidTotal number of employees: 14,928 Emerging locations: AqabaAnnual growth rate of IT/BPO sector: 25 percent http://www.intaj.net/outsourcing

Advertorial Opportunities and Future Potentials The Face of Jordan Now and BeyondJordan’s commitment to economic liberalization and its privatization program have been recognized by theWorld Bank. The World Bank lauded the privatization program as one of the most successful programs inthe Middle East and North Africa (MENA) region.Jordan has created a competitive, free market Jordan’s strength lies in the ICT, health and Jordan is also taking necessary steps tothough a multi-pronged privatization financial sectors. The growth of the enhance the existing infrastructure base inapproach. Today, the private sector plays a outsourcing industry is expected to the country. In 2010, VTEL Jordan andmajor role in spearheading growth and concentrate on these sectors by building Reliance Globalcom are establishing a linkdevelopment in the country. Jordan is now vertical specialization in financial services, to the FALCON undersea cable throughseen as one of the most business-friendly medical services, IT outsourcing, Aqaba which would triple the currenteconomies in the region. The government has telecommunications and tourism services. bandwidth. It will be the first Terabit cablealso taken significant steps to streamline landing in Jordan. The future of the ICT sector looks rosy withregulations and decrease red tape. the sector continuing its exponential The future of outsourcing in JordanEstablishing business ventures in Jordan now growth. Jordans National ICT Strategy for promises to be bright with an industrytakes less time than the average number of the next three years identifies the sub- poised for growth in all sectors. KPO anddays in the MENA region. sectors that are conducive for growth in the BPO operations are expected to head the current economic situation in the country. growth ably supported by concertedThe Development Zones established across Government initiatives to facilitate this efforts put in by the government and thethe country in key business areas offer growth are also laid out. The plans include private sector. An attractive businessreliable infrastructure, specialized services, developing a USD 3 billion ICT sector, environment, combined with supportivelabor and resources to access major regional provision of 35,000 jobs and increasing government policies and world-classand global markets. At present, there are six Internet penetration to 50 percent. Other ICT infrastructure, will continue to make Jordanzones that are operational throughout the initiatives include provision of laptops to one of the most sought after outsourcingcountry offering various investment university students, encouraging women in locations in the MENA region.opportunities. Jordan’s ICT sector today is the technology programs and graduate Contact info:fastest growing sector offering more than Int@j internship programs.80,000 jobs with an annual average growth Tel: +962 6 5152322rate of 25 percent. e-mail: info@intaj.net http://www.intaj.net/outsourcing

Quotes from Reports Advertorial TestimonialsJordan at the ninth place is another top multi-lingual agents with university designed to make Jordan more accessibleperformer as it has solid capabilities in IT and education, coupled with excellent language to the rest of the world.is home to numerous successful outsourcing skills has been a compelling reason for thiscompanies that compete internationally. It growth. Jordanian telecom has invested over USDhas also one of the region’s most favorable 400 million in recent years in a number ofbusiness environments. It is clear that from the standpoint of technology solutions designed to make telecommunications, Jordan has made Jordan more accessible to the rest of the~ A.T Kearney Report 2009 significant strides over the past decade. In world. addition to the efficiencies still being realized by the deregulation of the telco ~ DatamonitorCurrently, there are several contact center sector in 2005, Jordanian telecom hasoperations in Jordan serving clients invested over USD 400 million in recentdomestically and offshore, across a variety of years in a number of technology solutionsvertical markets. In addition, the availability ofPublicationsIt looks like another little oasis of IT delivery is As to the cultural milieu, Jordan has an open have rendered it definitive advantages,building up as the vast sands of the Middle and welcoming arm. On the infrastructure including a favorable time zone, proximityEast blow winds of new market opportunity; side, areas like powers, roads and buildings to continental Europe and the countrysnow Jordan joins the club, as it gets all set to are positive. It has already been recognized perception as a stable oasis in a stormy, butwoo the outsourcing industry. on the eco-friendly distinction, where the vital, region. example of Amman, a building zone, is citedAt the Nasscom Summit 2009, foreign as an example, and an award-winning case Enthusiasts also point out that Jordaniansdelegations of many hues and shades were in masterful city planning. can offer relatively low compensation costs,seen exploring and selling business as well as exposure to English languages byopportunities in the new world order that is ~ Global Services Magazine virtue of its strong focus on education,shaping up for a post-recession scenario. We especially at the tertiary level.could see delegates from Jordan too. Theywere not only prepared for a strong ~ Jordan Business: Jordanian Magazinecompetitive pitch, but also had large To highlight the benefits, Jordan’sspoonfuls of the pudding’s proof up their geographic and geopolitical positioningsleeve.TestimonialsJordan is open for business with a very dedication has paid off, and businesses Development Zones.capable and sought after workforce, continue to succeed. Thanks to all thecompetitive cost structure, political stability, partners involved, the country continues to His Excellency Dr. Bilal Bashir Chief Commissioner, Development Zonesease of access, robust ICT infrastructure, as gain visibility as an outsourcing destination. Commissionwell as a government that is fully committedto creating the right investment environment. Som Mittal President, National Association of SoftwareThese are only some of the factors that and Services Companies (Nasscom)position Jordan as a great global destination Jordan has enabled the ITO/BPO servicesof choice as well as the ideal access point and industry and we run our operation supportedgateway to the Arab world. by a strong legislative base, a sound telecom infrastructure and skilful human capital whichHis Excellency Mr. Marwan Juma BPO investors will find in Jordan a highly really makes our business succeed. TheMinister of Information and Communications advanced legislative and infrastructure government is involved in updating the skillsTechnology platform that supports their work and of IT trainees to qualify them for our line of business endeavors. The Development Zones business. Commission (DZC) facilitates all necessaryComing to Jordan opened our eyes to the procedures and arrangements for the Kaushal Shahcountry’s potential. The country’s will and industry to operate and prosper in the Managing Director, Aspire http://www.intaj.net/outsourcing

by Sruthi Ramakrishnan� location Assessment: Perception and Reality for Global Businesses 28� Europe: Showcasing the Challenges and opportunities 32� Perspectives and Potential of Asia’s Hotspots 36� Middle East & Africa: leveraging Africa & Middle East 41� latin America: The Enduring Promise of latin America 44

regional DynamicsLocation Assessment: Perception andReality for Global BusinessesGlobal Outsourcing Locations Evolution of Services Driven Economy 15 years ago, there were very limited options in terms of outsourcing. India was the predominant answer for IT outsourcing. 10 years ago, BPO started coming up as well. At that point, 2 primary locations emerged: India and Philippines. Predominant clients for them were the US and Uk, basically the English speaking countries. When Europe started showing interest, people were very finicky about the data Acts and data privacy as they started having Eastern Europe come into prominence. Some of the South American countries began coming into prominence through nearshoring from the US and their Spanish language capability. What is it that makes a location emerge as a preferred location? Perceptions about a country and the reality can be very far (illustrated in table 1). Why are clients seeking new geographies? Clients are beginning to look outside India, Canada, Philippines and Eastern Europe and Latin American countries, because of: • Localization- More so if you have a product and have to localize that for a given country. Every product cannot be built to meet the local conditions of every country, but a regional center can help facilitate localization of products. Also, a client in the US outsourcing his call center functions would rather have his service provider provide services out of a center in the US rather than offshore. • Evolving and Developing Processes- Some locations are reaching talent saturation, leading clients to look for other locations where they can get talent at better quality and at a better price.Figure 1 the GlobalOffshoring Landscape Source: Tholons- Global Services January 2010 webinar ‘Location Assessment: Perception and Reality for Global Businesses’28 GS Destinations Compendium 2010 www.globalservicesmedia.com

regional Dynamics City Perception Reality table 1 Global Delivery Locations - Perception vs. Colombo, Sri A war-torn nation One of the fastest emerging FAO destinations with Lanka more than 50,000 people employed in the IT/BPO Reality industry in Colombo and growing at over 20 percent year-on-year. Sri Lankan IT BPO industry grew at 23 percent even during the war time. accra, Ghana Cocoa Producer Nation Destination for Back Office processes with presence of companies such as ACS and 3G (Contact Support) and the development of initiatives such as the Kofi Annan ICT Center of Excellence for Human Capital and Infrastructure Development. Companies like 3G are looking to expand workforce in the next few years in this commercial gateway to Western Africa. Bhubaneswar, Crowded Tier-II City One of the fastest growing IT regions in India with India ample labor force in IT and Engineering (with 60 Engineering colleges producing 25,000 graduates per year). Bhubaneswar is a location of choice for big industry players in India with the presence of companies such as Wipro, Infosys, Mahindra Satyam, and Tata Consultancy Services. Santiago, Chile considered as a Foreign investor-friendly business environment and Chile small LatAm country with technical industry capabilities strongly support high- a limited population and value services in KPO-ESO. Chile’s IT-ITES workforce not known traditionally produces $38,095 per FTE in the industry which is for outsourced services 41 percent more than India. This is due to higher value services being performed out of Chile compared to India (on an average).Source: Tholons- Global Services January 2010 webinar ‘Location Assessment: Perception and Reality for GlobalBusinesses’ Figure 2 Key Question: Where should we locate?Source: Tholons- Global Services January 2010 webinar ‘Location Assessment: Perception and Reality for GlobalBusinesses’29 GS Destinations Compendium 2010 www.globalservicesmedia.com

regional DynamicsFigure 3 Parametersinfluencing selection:Process Requirements andGeographical & OperationalDelivery Models. Source: Tholons- Global Services January 2010 webinar ‘Location Assessment: Perception and Reality for Global Businesses’ Outsourcing • Integration of new countries into the Global Economy (Example: Brazil, South to the Right Africa, China) Location vs. • New Customer Segments are emerging- For example, customers are looking at Brazil because it is a significant economy growing at a fast pace. So while certain Offshoring? things can be outsourced to Brazil, at the same time clients are looking at address- The change in terminology ing the available market there. The same can be applied to China. is a sign of maturing of the • Customer Demand is becoming more sophisticated industry and its players. The right solution at this point to Why will existing solutions not be enough in the new decade? the outsourcing/ offshoring/ • Closer to Customer nearshoring debate is global • New Generation of Services sourcing. It is more offshor- • Specialized Skill Requirement ing than outsourcing. • Established Locations inhibited by Talent Saturation Why global sourcing? Firstly, if something is not Moving from Emerged to Emerging outsourced to a third- party There is a move, where clients are feeling that emerged destinations are saturated in vendor, it is insourcing. terms of the labor pool, and have salary inflations year over year. There is a churn in Outsourcing does not neces- the people which leads to lower quality. So clients are looking for emerging destina- sarily cover that. Secondly, a tions which probably have a higher talent pool available, lower costs and governments significant number of clients more eager to attract investments. Clients who have been in outsourcing for around are willing to have everything 10 years are moving from established locations. sourced and not keep any- Main factors in play in this shift: thing within the physical  Emerging destinations being viewed as opportunities: confines of their office. This • merging Locations will hold the key in the near future for Global corporations E does not mean it is going as they will provide as host of new opportunities. They are looking at such loca- off the shore or out of the tions to bring high quality and scale together with low costs. country. • merging Economies, opportunities to tap the domestic talent and market, and E So the only term today evolving customer demands are driving client and service provider migration to which covers all of this is new international geographies global sourcing.  Perception marketing: • erception Marketing: Effectiveness of conveying concrete information, strategic P30 GS Destinations Compendium 2010 www.globalservicesmedia.com

regional Dynamics Figure 4 Emerging Destinations – What to Look ForSource: Tholons- Global Services January 2010 webinar ‘Location Assessment: Perception and Reality for GlobalBusinesses’ marketing, and promotions to combat negative external perceptions will be crucial in attracting potential clients and competing in the global services industry • Employability” and “Scalability” are now more critical to “Productivity” and “ “Sustainability” with exceedingly lower emphasis on “Cost Advantage” alone Importance of distinct Value Propositions: • ompetitive and shareholder pressures are driving demand, creating more nim- C ble, efficient market players • ue to the rapid maturity of the services outsourcing industry, locations are D struggling to create and sustain their competitive advantage – making it even more important for “value propositions” to be brought out using the “Centers of Excellence” model31 GS Destinations Compendium 2010 www.globalservicesmedia.com

regional DynamicsEurope: Showcasing the Challengesand OpportunitiesThe Emerging Nearshore Western Europe has done a significant amount of nearshoring to Eastern Europe. Over the years, the gap in GDP between Western Europe and Eastern Europe has widened instead of declining, which has helped in attracting clients from the former to the latter. This has helped in making nearshoring to Eastern Europe an attractiveProminent nearshore options: opportunity.Eastern Europe It has been a destination of choice for Western Europe for more than a decade and6 poland: kraków, Warsaw, this attractiveness has become stronger over the years. Gdansk, Wroclaw6 Czech Republic: Prague, Brno CHALLENGES6 hungary: Budapest  Clients face dilemma- No single country can take care of all languages. But6 Russia: St. Petersburg, Estonia can take care of the 5 major languages. Moscow, Nizhniy Novgorod,  Most smaller countries do not offer scale Rostov-on-Don, Novosibirsk6 Romania: Bucharest, ADVANTAGES Cluj-Napoca  Europeans are conservative businessmen compared to their American counterparts6 Ukraine: kyiv, Lviv and are more comfortable keeping work closer to home. Thus nearshoring is a favored option.6 Belarus: Minsk  Considering a cut off population of 10 million, only Russia, Ukraine, Poland,6 slovakia: Bratislava Romania, Belarus, Czech Republic, and Hungary have the advantage of a sizableBulgaria: Sofia talent pool6 slovenia: Ljubljana  Multiple factors enable to be perfect nearshore options for Western Europe like: 1. Financial Attractiveness 3. Trade laws (European Union)6 serbia: Belgrade 2. Cultural compatibility 4. Excellent Education6 estonia: Tallinn6 Croatia: Zagreb Major clients nations in the region are:6 Latvia: Riga  United kingdom  Denmark6 Lithuania: Vilnius  Spain  Finland6 Malta: Valletta  France  Germany  Italy  NorwaySource: Global Shore 2010 webinar  Sweden‘Europe: Showcasing the Challenges andOpportunities’ REGIONAL DYNAMICS  European Union member countries in Eastern Europe have significant advantages, providing them the edge to become “nearshore locations of choice”  A recent trend is of clients preferring to send work onshore or to nearshore locations. This is true for US itself. This is not necessarily because of a language preference. This is being preferred even at a higher cost than offshore locations. This trend is favoring Eastern Europe.  Being a part of the EU makes the smaller countries offering cost arbitrage very attractive nearshore destinations, some other benefits for Eastern European32 GS Destinations Compendium 2010 www.globalservicesmedia.com

regional Dynamics countries becoming members are: • Political stability and greater integration • Increased trade • Increased inward investment • Social policies and subsidies Eastern Europe has attracted a lot of investments from service providers and clients (captive operations) in the last 3-5 years making it a strong “offshore cluster” and a “skills cluster”Global Clientèle With 63 percentage of all developed countries in Western Europe, it is the largest cluster of buyers across the world. This attracts large business firms from across the world to have centers in the region to cater to the domestic markets in these developed economies. Eastern Europe hence caters to the global clientele indirectly, this has successfully built a strong brand for “Nearshore to Eastern Europe”, offering cost differential of 15-20 percentage compared to Western Europe. Clients say productivity per employee higher in Eastern Europe than offshore locations like India, Philippines and China. High skill sets available for processes like Product Development (Turkey, Ukraine, Russia), Regional Multilingual Skills (top 5–6 locations of previous list), and R&D (Russia and across the region). Europe: Centers of Excellence Region/ Country/ City Core Specialization Companies Established Figure 1 Europe: Centers of Excellence. • Specializes in R&D, Infrastructure SAP, Quest Software, IBM, Microsoft, Western Europe Ireland Dublin Accenture, Marino Software, PMI Services and Custom Development Application Software, Infosys, Deloitte, Amazon • High value processes in Financial Barclays, Accenture, InfoTech, HCL, U.K. Belfast Analytics, R&D and Applications Capgemini, HP-EDS, KPMG, Xerox, Development Management ECOM, First Data • Business Analytics, Finance and Google, IBM, Motorola, Fujitsu, HCL, Poland Kraków Accounting Outsourcing, multilingual Capgemini, ACS, Hewitt, Quantum, Contact Support, HR Outsourcing Sabre • Focused on HR Outsourcing, R&D Sun Microsystems, Accenture, GE, Czech Eastern Europe Prague processes and emerging destination for SAP, Google, Intel, Capgemini, Republic Engineering design services Mahindra Satyam, IBM • Focused on HR Outsourcing, R&D in SAP, Microsoft, Sun Microsystems, Hungary Budapest Software Development and Testing TCS, Genpact, Cognizant, Canon, Mahindra Satyam, SCA • Specializes in Engineering Design and Intel, Motorola, Sun Microsystems, Russia St. Petersburg R&D services. Boeing, HP, Auriga, Google, Luxoft, EPAM, Arcadia Page 10Source: Global Shore 2010 webinar ‘Europe: Showcasing the Challenges and Opportunities’PRIMARY VALUE PROPOSITIONIt is a viable nearshore destination for Western European clients for several reasons: Western Europeans prefer outsourcing to Eastern Europe than to traditional offshore destinations like India or Philippines due to the unique service delivery profile of Eastern Europe. Factors such as cultural affinity, skills expertise, labor pool availability which includes engineers and scientists who are not abundantly found in offshore locations, contribute to this appeal.33 GS Destinations Compendium 2010 www.globalservicesmedia.com

regional Dynamics  Bottomline- Eastern Europe would continue to maintain this advantage at least in the near term. Conclusion: Challenges and Opportunities Challenges and Key Accelerators: Opportunities. •  Strong combined “value proposition” for locating in Europe  Nearshore advantage with Western Europe as client  Excellent education system with high rate of employability  Excellent cultural/linguistic compatibility  Part of European Union (same trade laws, incentives, currency etc.)  Time zone affinity  High quality and reliable infrastructure and connectivity • Key Inhibitors:  Bureaucracy: Communism has left its legacy in excessive bureaucracy and processing delays which often leads to ineffective business execution  Corruption: The high levels of corruption in certain Eastern European nations often leads to additional costs. Although this trend has decreased with the implementation and enforcement of more stringent standards and policies by EU  Labor/Talent Migration: Countries in the region have experienced a migration of talent towards Western European countries where the pay is higher. This constitutes one of the shortcomings of nearshoring to Eastern Europe, and is a result of the relatively short distances between provider and client locations Page 11 Source: Global Shore 2010 webinar ‘Europe: Showcasing the Challenges and Opportunities’ Q/AQ Has macro-economic situation diluted the key value proposition of any of these countries? The income coming from outsourcing is export- oriented. There is very little emphasis in terms of domestic currency. There is significantly more impact in terms of currency of the source geogra- phy rather than your own. If the currency valuation of a country goes down, it may not be good for the country itself but it increases its attractivenessQ Russia does not seem to have performed according to the potential it is believed to possess. What can Russian industry do to have a bigger stake? There is some challenge in terms of promoting what can be serviced out of Russia. They need to do more focussed pormotion of what they can really do, especially cities like Moscow and St. Petersburg. Outsourcing history in Russia goes back a long time, but there have been only a few companies which have been able to take the glag and move forward. And most of them are focussed on R&D, in telecom, wireless, security. One of the main issues related to outsourcing here is that the process discipline in Russia is not as strong as in rest of Eastern Europe, or like in India and Philippines. Also, the infrastructure, as compared to other Eastern European countries is not as robust. So, experts feel Russia will continue to lag as compared to other Eastern European countries.34 GS Destinations Compendium 2010 www.globalservicesmedia.com

regional DynamicsQ Are there any IPR issues in Eastern Europe? This has been one of the boons of being part of EU. As countries adopt the principle and cover of EU, they are able to care of such issues.because of standardization of IPR in the European Union. They also possess the capability to manage outsourcing from countries outside this particular block.Q Which would be the best European market for SME IT outsourcing companies? That depends on the exact area the IT outsourcing company is in. From a smaller perspective, for basic IT, the best destinations would be Poland, Czech Republic.But if a company is in telecom or product development, then places like Russia can be considered.Q What is the breakup of IT Services, IT Infrastructure Services and BPO services curently provided from Eastern Europe? Eastern Europe follows a different trend from other regions. Eastern Europe as a group of con- tries has a very different profile from India or Philippines. IT services is probably 40 percent of this. BPO would be another 40 percent, and about 20 percent would be infrastructure services.Q What should be the strategy for a small country like Moldova which does not have the scale, but has a location that is proximate to the EU? What is the potential for partnering with players in India and the Philippines to kickstart the industry? For a smaller country it is very essential that they differentiate themselves through a niche capability. Any partnership with India or Philippines would depend on what that niche is. Niche is more in BPO and KPO. One of the things that a smaller country can do is to focus on analytics. There is a significant amount of employability in that country, considering the demand for analytics. So from a BPO/ KPO perspective, that would be the right direction for that country.For them to go into F&A would be absolutely wrong. Even from an IT perspective, there seems little scope for a country like that to partner with India. A niche capability would be fine, at the same time some of the ERP, SAP- based IT stuff or looking at doing something in business intelligence would be good areas in IT.Source: Global Shore 2010 webinar ‘Europe: Showcasing the Challenges and Opportunities’ Global Shore 2010 Webinar Series Europe: Showcasing the Challenges and Opportunities View Webcast35 GS Destinations Compendium 2010 www.globalservicesmedia.com

regional DynamicsPerspectives and Potential of Asia’sHotspotsChina and Philippines in Focus Global IT spend is expected to increase at a faster rate post 2009 as several service buyer markets unentangle themselves from recession. Growth may still be tepid but nonetheless more significant than the previous 3 years. Post recession clients are more aligned towards offshore benefits. Drivers for Technology Spend:  Cost reduction as clients look for demand recovery  Growth in competition leading to need for scalable, optimized and effective operations  Diversification of business and expansion into new markets is pushing clients for innovation and faster time to market  Growing SMB participation as service buyer (currently at 33 percent of total spend) globally How suppliers can exploit growth in IT spend? There remain opportunities for outsourcers, as offshoring spend remains relatively small  Identification of new delivery and engagement models  Overhauling of existing resources/ network to offer higher value  Foster innovation/ IP/ assets- must for gaining edge over competition  Develop ready to deploy platforms / frameworks for multiple geographies in order to enable faster time to market The demand side is still composed of two regions of the globe- North America and Western Europe, which together contribute about 55 percentage of global IT/ BPO spend. Offshore revenue share is 75 percentage. But domestic markets from BRIC nations will also become increasingly important players in the near term. The supply side will stretch across geographies and begin accelerating the pace of competition. Countries in S. America such as Argentina, Chile, Colombia, Uruguay, etc. are some which will be vying to supply clients, particularly the Hispanic population in US. The incumbent Indian providers will continue to build delivery centers in key delivery regions such as Latin America, Eastern Europe and China. Game changing strategies on supply side :  Vendors positioning themselves as End to End service providers rather than cost saviors to increase wallet share  Increased vendor consolidation and diversification (eg. Dell acquired Perot Systems, Product vendors expanding services portfolio etc)  Building capabilities around RIM/ IO* and platform based BPO services (Service36 GS Destinations Compendium 2010 www.globalservicesmedia.com

regional Dynamics lines witnessing traction from client side) Vendors entering new regions to support existing client’s localization needs (deep- ens client reach and wallet share)Strong Domestic and Regional MarketsThere is strong market potential in Asia Pacific region as evidenced by robust growthrates of regional domestic economies. Apart from India and China, smaller countrieslike Philippines and Vietnam, which are seen as supply side components, have strongdomestic consumption potential, as evidenced by their strong growth rates on theback of increased domestic consumption. Healthy growth in IT spend provides tremendous scale for growth in these markets Current outsourced market for the region is over US$22 Billion - primarily served by local & regional vendors Technology spend by government, BFSI, telecommunication and manufacturing will drive the growth International and regional vendors serving these markets have witnessed double digit growth Asia: Strongly Positioned to Facilitate Growth of Suppliers… Established Cities Key Characteristics Value for Clients Figure 1 asia: Strongly • Most prominent centers of offshoring (lowest risk) Positioned to Facilitate • Bangalore Delhi NCR, Mumbai, Manila NCR, Chennai, Hyderabad, Pune, • Access to huge employable pool with niche and diversified skill sets. Innovation & Growth of Suppliers… • Hosts strong lines for innovation due to well established Time to Market Cebu City, Shanghai, Beijing and processes and delivery capabilities. others • House client’s commercial operations and BFSI captives/ R&D centers of global clients and vendors Emerging Cities • Dalian, Chandigarh, Kolkata, • Lower salary inflation when compared to established centers Cost Colombo, Coimbatore, Guangzhou • Proximity to education institutes/ universities provides Optimization & (Canton), Kuala Lumpur, Jaipur, stable supply of talent • Attractive infrastructure and government policies provide Growth Chengdu etc long term confidence to investors Emerging Tier II / III Cities • Locations with high potential to compete head on with • Bhubaneswar, Iloilo City, emerging cities • Apart from providing cost and talent advantages these Niche Skills Thiruvananthapuram, Santa Rosa etc cities are leveraged to service domestic market and verticals such as government New Cities • Xian, Taipei, Seoul, Ahmedabad, • Low cost of operations is major selling point Mysore, Jakarta, Bangkok, Davao, • Proximity to established/ emerging locations would Expansion strengthened their visibility to clients Bacolod, Penang etc Page 7Source: Global Shore webinar 2010 ‘Perspectives and Potential of Asia’s Hotspots: China and Philippines in Focus’Service Delivery Cluster-In the past 10 years, the service delivery cluster in Asia (earlier composed primarily ofIndia, Sri Lanka and Philippines) has evolved to a circle of multiple nations providinga multitude of services and catering to a diverse group of markets and verticals. For this cluster to further expand, and further clusters will emerge across the globe.Each service cluster will develop its own niche and market development segment.These clusters will lead to growth of the region as a whole.Top Cities in AsiaContinuous demand has led to proliferation of outsourcing locations in Asia. Indian cities continue to lead the pack, followed by Philippines and China catering to both global and domestic requirements. Many, particularly in China are37 GS Destinations Compendium 2010 www.globalservicesmedia.com

regional Dynamics looking at catering to the domestic market instead of the global requirements.  Manila NCR, after Indian cities like Bangalore and Delhi, has been consistently making it to the top of the outsourcing cities lists.  China follows India in terms of most number of cities on the lists. Dalian has been consistently moving up rankings.  Several cities moving down the rankings are also an indication of strong competition among the cities. This also indicates the aggressiveness of cities in promoting themselves as locations of choice.  Most of the emerging Tier II/III cities are from Southeast Asia- from Philippines, Indonesia, Thailand and Malaysia. This could be mostly due to initiatives under- taken like by the Business Processing Association of Philippines (BPAC) Centers of Excellence: Established CentersFigure 2 Centers of Country/ City Core Specialization Companies EstablishedExcellence: Established • Contact Support, Business Analytics, Oracle, Accenture, HP, Amdocs,Centers Delhi NCR Software Development, Product Capgemini, SAP, Wipro, Infosys, Development, Engineering Services Siemens, Motorola • Application Development , Engineering Accenture, Capgemini, TCS, Wipro, Hyderabad Services, Product Development, Infosys, Symphony, KPMG, Delloite, Software Testing, Contact Support Dell, Hewitt, Karvy, Mahindra Satyam Accenture, Capgemini, TCS, Wipro, • FAO , Financial Analytics, Contact Mumbai Infosys, KPMG, Deloitte, Morgan Support Services Stanley, JP Morgan, IBM Daksh India Sun Microsystems, Accenture, GE, • Software Development, R&D, Contact Bangalore SAP, Google, Intel, Capgemini, Support Services Mahindra Satyam, IBM SAP, Microsoft, Sun Microsystems, • Contact Support Services , Software TCS, Genpact, Cognizant, Canon, Pune Development, Testing Mahindra Satyam, SCA Philippines • Contact support services, FAO, Medical Accenture, Convergys, People Support, IBM, HSBC, JP Morgan Chase & Co., Manila NCR Transcription Sykes, Telus Page 13 Source: Global Shore webinar 2010 ‘Perspectives and Potential of Asia’s Hotspots: China and Philippines in Focus’ Centers of Excellence: Emerging DestinationsFigure 3 Centers of Country/ City Core Specialization Companies EstablishedExcellence: EmergingDestinations Philippines Cebu City • High value processes in Financial Analytics, R&D and Applications Accenture, AWS, NCR, Lexysoft, Alliance Software, Sykes Asia, Aegis, Development Management Stream, Convergys, ePerformax • Software Development, ADM, R&D, IBM, World Software Services, Neoris, Shanghai FAO softtek, Infosys, Accenture, Sitel, ACS SAP, Tumbleweed Communications, China Beijing • Software Development, ADM, R&D, FAO IBM, BTC International Contatct Center, OPI Global, HP IBA Group, Honeywell, SGI, Shenzhen • Software Development, ADM, R&D, FAO Accenture, IBM, CSC, Deloitte, Ernst & Young, Genpact FPT, HPT, HiPT, IBM, VTCOMTECH • ESO Software Development, Contact Co. Ltd, Equant, Contact Centre Hanoi Support Services Vietnam Vietnam • ESO; Software Development, Contact Ho Chi Minh City Teledata, VPT, Jupiter Systems, FPT Support Services Page 14 Source: Global Shore webinar 2010 ‘Perspectives and Potential of Asia’s Hotspots: China and Philippines in Focus’38 GS Destinations Compendium 2010 www.globalservicesmedia.com

regional Dynamics Conclusion: Challenges and Opportunities • Key Accelerators: Challenges and  Globally the strongest cluster of countries for outsourcing (India, Philippines, China, Opportunities. Vietnam, Singapore, Malaysia, Sri Lanka)  Most mature incentives for outsourcing industry at offer in the region  Key region to global outsourcing strategy for all organizations  Huge employable pool as a result of quality education conducive for IT at affordable salary cost  Cultural affinity to client market supported by linguistic compatibility  World class infrastructure to house delivery centers, R&D and Innovation labs • Key Inhibitors:  Quality of Life: Although the infrastructure has developed by leaps and bounds in these countries, it is still difficult to retain the top level management professionals from client nations if they have to reside in the region  Sociopolitical Risk: Risk of terrorism, higher crime rates, and political instability in the region  Corruption: High levels of corruption in Asia often leads to additional costs. The trend is expected to subside as governments are becoming aware of export contribution from offshore services Page 16Source: Global Shore 2010 webinar ‘Europe: Showcasing the Challenges and Opportunities’ Q/AQ What is keeping back cities like Dhaka from being among the list of outsourcing destinations? Numerous factors are taken into account for an outsourcing destination. Primarily scale and quality of labor pool, costs, business capital aspect which mostly involves government benefits and incentives, the competitive landscape within a particular location. Infrastructure is the fourth major aspect considered. Risk profile is also very important. Quality of life aspect involves the social infrastructure, education, hospitals, availability of facilities, etc.Q Why is Kuala Lumpur, which is otherwise commercially rated high in terms of business volume, not part of Asia’s top outsourcing destinations? For Kuala Lumpur the cost component has to be considered. That holds it back from moving up. But it is a feasible location for higher value services. A lot more shared services operators are locating there, instead of outsourcers, and that is how the value proposition is being considered there. The same set of reasons could also hold for Singapore, aside from the scalability of talent.Q Is the IP issue with China a continued concern or is it subsiding? It is a perception-to-reality question. Perception is there are security risks in China and reality is there are such risks. But often times, it is a cost vs. value consideration that many locators look at when considering China. Are the cost benefits worth managing the security and IP risks? It also depends on the sliver of services being discussed. As more mature Indian or American providers moving there infuse global best practice standard, the risk will be mitigated or lessened. This makes the value proposition for China even more appealing. Introducing legislation for IP protection will also improve matters.39 GS Destinations Compendium 2010 www.globalservicesmedia.com

regional DynamicsQ What is the best location in Asia in terms of local management professionals and local talent? All of the outsourcing locations have a mid-management crunch. That is a weak spot in terms of structure. Most of the top cities in this list have been active for more than a decade. So there is a pool of management talent which will be available there. So selection is the key there. There are a large number of Indian managers in the Philippines. Cost will not be a consideration here, but that is not a solution for the long term. Holding on to talent is a problem in locations like Philippines. Source: Global Shore webinar 2010 ‘Perspectives and Potential of Asia’s Hotspots: China and Philippines in Focus’ Global Shore 2010 Webinar Series Europe: Showcasing the Challenges and Opportunities View Webcast Global Shore 2010 Webinar Series Perspectives and Potential of Asia’s Hotspots: China and Philippines in Focus View Webcast40 GS Destinations Compendium 2010 www.globalservicesmedia.com

regional DynamicsMiddle East & Africa:Leveraging Africa & Middle EastLower per capita GDP in the region provides significant cost advantage in all the citieslocated in Africa and Middle EastNearshore opportunity for Europe: Time zones similar to Europe offer immense near-shoring opportunity for the region. Mauritius has the greatest time difference in the region with London, and that is of four hours. The cornerstone of value proposition of any location is availability of talent, its employability and scalability. Improving higher education & multilingual language skills are key accelerators. Major countries of the region come in the top 100 of the global higher education index. Buyers are looking at a wider range of language skills. The language capability (English, German, French, Arabic, Spanish) available here is not easily available in other locations. There are several areas of improvement needed, yet there is improvement in the top outsourcing cities of the region. The improved infrastructure provides better broadband connectivity and electricity supply – this is essential for operational continuity and reducing downtime Various government agencies have been formed to smoothen the procedures to start the business, protect the investor and reduce the corruption. Political Risk scores must be further improved in the region offerings of the two main regional hubs of AfricaGlobal Clientele Sub-Saharan Africa (Southern,With 63 percent of all developed countries in Western Europe, it is the largest cluster West, East, Central)of buyers across the world. This fact has not escaped the attention of large business 6 English, French, Portuguese,firms from across the world that have set up centers in the region to cater to the 6 Banking, Financial Services,domestic markets in these developed economies. Insurance (BFSI) Thus Africa and Middle East cater to the global clientele indirectly - this has suc- 6 Telecommunicationscessfully built a strong brand for “Nearshore to Middle East & Africa”. What Latin 6 VoiceAmerica is to the US, experts say Africa and Middle East will emerge for Europe. 6 Back Office 6 kPOCenters of Excellence in Middle East & Africa- north Africa Cairo: best-in-class promotion strategy followed by the government of Egypt 6 Arabic, German, Spanish Johannesburg: does not have geographical proximity but does have the advantage 6 Services IT of time and cultural proximity to Uk and other clients in Western Europe 6 Software development Casablanca: Expected to emerge as a strong player in coming years with its 6 Computer programming excellent French capabilities 6 Back Office 6 R&DSouth Africa has identified and adopted the following five strategic pillars for strength- Source: Global Shore webinar 2010 ‘ening and enabling its IT and BPO structure: Middle East & Africa: Leveraging Africa & Talent Development Middle East’41 GS Destinations Compendium 2010 www.globalservicesmedia.com

regional Dynamics Comparative snapshots of African Outsourcing DestinationsFigure 1 Comparativesnapshots of africanOutsourcing Destinations Note : the list is not exhaustive : the list is not exhaustive Note Source: Global Shore webinar 2010 ‘ Middle East & Africa: Leveraging Africa & Middle East’ Source : Avasant  Strategic Marketing  Quality Standards  Incentives  Telecoms Africa: an Alternative to India and PhilippinesFigure 2 african Countries  Africa lies in between the US and India and thus provides an evening shift for USBPO & It ServicesAfrican Countries BPO & IT Services offshorers versus India’s night shift. This further enhances the low attrition value proposition for Africa South Africa : BFSI, Telecoms,Retail, ITO,KPO, LPO  Setting up an African operation can costs 10–20 percent than India Ghana : Customer Care, Data Entry,English  Despite the Economic Recession, African markets have grown at a rate of 5–6 percent Malawi : Customer Care, English Nigeria : Financial Services, Back Office Mauritius Kenya : Financial Services, French, IT : IT Services, Financial Services  The Services Sector contributes to over 60 percent of the GDP of some African countries Egypt Morocco : Software Development, Back Office : IT Services  African Nations are formulating policies that encourage the development of the IT Tunisia : IT Services and BPO ServicesSource: Global Shore webinar 2010 ‘  Free trade zones, tax exemptions, providing incentives for technology businessMiddle East & Africa: Leveraging Africa & operations, relocation and development are some of the support measures offeredMiddle East’  Governments have steadily reduced the regulatory overhead and timeline required to start a business.  Africa is a risk-diversification option for India and the Phillipines Q/AQ What are the political risks in South Africa? Experts feel that the entire region is still reeling from certain events of the past, which has pre- vented the outsourcing industry from going to the region as fast as it should have. But now varied requirements are coming from different source geographies.Q What is the effect of China’s influence in Africa as China continues to use its economic power to buy natural resources in the region? China has been focused on natural resources and commodities. There have been a lot of influences as far as services economy is concerned. But one issue where China’s influence is having a spillover effect is the infrastructure. China has been helping build infrastructure in several African cities in return for commodities.42 GS Destinations Compendium 2010 www.globalservicesmedia.com

Global Shore 2010 Webinar Series regional Dynamics Europe: Showcasing Conclusion: Challenges and Opportunities the Challenges and Opportunities • Key Accelerators: Challenges and Opportunities.  Multilingual capabilities can extend market reach to European markets  Local Governments have been encouraging service industry by forming various View Webcast supporting organizations  Better time-zone affinity to Europe compared to Asian destinations  Other than Israel, most countries have low per capita GDP making them cost effective  Due to proficiency in Arabic - Middle East region is also a service buyer market • Key Inhibitors:  Currency Risk: Highly volatile currencies and risk of inflation makes investors Global Shore 2010 Webinar Series cautious  IP Risk: some of the countries in the region lead the world piracy and cyber crime lists Perspectives and Potential of Asia’s  Diluted Value Proposition: Most countries in the region offer similar value proposition - a unique positioning is critical for individual countries Hotspots: China and Philippines in Focus Page 13 View WebcastSource: Global Shore 2010 webinar ‘Europe: Showcasing the Challenges and Opportunities’Q What is the role of World Bank in promoting IT/ITeS or BPO activities in the region? World Bank is taking a keen interest and supports various projects across the continent. Individual countries approach the World Bank with their needs. Kenya has projects funded by the World Bank. In Rwanda, it is funding an initiative called eRwanda, which is about developing ITC Global Shore 2010 Webinar Series in the country. In such projects, the World Bank funds developing human skills, infrastructure particularly in the BPO sector. They help develop SMEs in the sector. It promotes uptake and usage of IT by the The Enduring Promise of government, so that at the end of the day, the government can itself kickstart the outsourcing sector by outsourcing its own activities. Latin America The World Bank also helps countries attract FDI to the BPO/ITeS sector. Helping ranges from assisting the formation of implementing agencies to help building capacity in a particular sector. View Webcast Global Shore 2010 Webinar Series Leveraging Africa & Middle East View Webcast43 GS Destinations Compendium 2010 www.globalservicesmedia.com

regional DynamicsLatin America: The Enduring Promise ofLatin AmericaUnique Regional Dynamics In recent years, clients have been preferring this region as a nearshore destination even at higher costs than some of the farshore destinations. Emerging destinations from the region are now competing with the more mature Asian offshore destinations. South America has the maximum number of emerging outsourcing cities – buoyed by growing US demand for nearshore services and regional economies tapping the under-utilized Services markets. Top Cities in the Region  Buenos Aires, Argentina has moved up in recent times.  Santiago, Chile- one of the most promising locations for kPO and ITO, and has very good skilled people to deliver on that. But Chile, with a population of 60 million, cannot afford the same scale as Argentina does. The question for Santiago is- can they train and make available enough skilled people to compete with Chile, to take certain scalable work for BPO?  Brazil has largest scale in the region and Sao Paolo is a very favorite destination for clients for domestic market. Just behind Buenos Aires in preference.  San Jose, Costa Rica is a significant destination for ITO.  Lima, Peru is a favorite as a lowcost nearshore destination  Challenge- Perception of Colombia as a high risk destination has undergone significant change, though clients are still apprehensive Regional Outsourcing Dynamics  Latin America has not caught up with inflation with regard to total cost, so is still cost- effective. But cost is not the only factor. Countries are looking at reducing total cost of operation: • Mexico promises to lower costs, and offers incentives • Uruguay has free trade zones which offer 0 percent tax • Colombia gives exemptions in taxes • Most govts have very aggressive promotion agencies.  Total cost of doing service in Latin America is going to fall. The dollar has been an issue in Latin America. The dollar is losing ground here, as in many other parts of the world. Last year was especially complicated in this respect. This year is a little more stable. Markets the Region can Address  With established regional markets, Latin America as a region has a very strong value proposition of having the ability to cater to multiple markets • earshore to US English and Hispanic Market- 20 percent of consumers in US N are Hispanic44 GS Destinations Compendium 2010 www.globalservicesmedia.com

regional Dynamics Value Proposition Strong Regional : Diluted Individual• European Markets in Spain (Spanish) and Portugal (Portuguese) • With established regional markets, LatAm Time zone issue- Latin America is very well positioned, is in more or less same proposition of having the ability to cater to time zone as in US and Europe.  Nearshore to US English and Hispanic Ma Analysts say that with the world talking about ‘agile development’, it is very dif-  European Markets in Spain (Spanish) and ficult to have agile development if you are farshore. • However, reaching the global market is a Latin America can be part of a dual strategy for companies- whatever has to be players more particularly small and mediu done in customer interface, do that with your Latin America team, and connect with your Asia-based team for the rest of the process. • Unique Value Proposition for individual c Analysts advise looking beyond outsourcing traditional works to Latin America, Figure 1 country positions revolve around - M many Value DESTINATION and thinking in terms of innovation. Latin America has leadership and partnership PropositionStrong Regional:of service delive  Leads to commoditization capability Diluted Individual for individual countries to diffe  Opportunity Clients find vendors ready to answer questions, and approachable as compared to other countries Pr Area offers not just cost-effectiveness but is ideally located for testing innovations, Fu to set up R&D facilities there. Challenge- Reaching the global market is a challenge for Latin America outsourcing players more particularly small and medium enterprises. Primary client Page 9 remains the regional market. The full potential of the region in catering to external markets is yet to be optimized.Value PropositionUnique Value Proposition for individual countries is often weak, as a result many coun-try positions revolve around being part of a ‘Multilingual Nearshore Destination’. The region has to make effort to identify the niche value proposition that it has,i.e., competitive advantage in niches within ITO, BPO and kPO industry. This willalso provide opportunity for individual countries to differentiate themselves from thepack Colombia - 33 percent graduation students here are studying engineering. Colombia is in fact, a country of engineers. yet it is not exporting engineering services. Uruguay- Medical industry can prosper here. A very renowned French medical institute has opened office here. Has more doctors per capita than any country in the region. Chile building its competitive advantage from natural resources. There are services Realizing Potential Figure 2 Realizing Developmental Areas Course of Action Realization Potential  • Comprehensive English training and proficiency  Human Capital programs have been implemented  • Technical/Finishing schools are now in place  • Increase focused Promotion activities through Marketing and partnerships between private and multilateral Promotion agencies to attract large captive operators • Government and Institutional support through Country Business Climate funding and policy building has been accelerating specific with focus on developing Service Industry associations • Expand market in US by enticing large Indian Market Expansion Providers to utilize region as a Delivery Hub • Transition from Regional to Global Market • Continue to transform image of South America, • Increasing ITeS SEZ /technopark build Reality vs. particularly in areas related to Security and ups across region Perception Infrastructure. Global image needs to be • Crime rate decreasing across South enhanced. AmericaSource: Global Shore 2010 webinar ‘LatAm: The Enduring Promise of Latin America’ Page 1045 GS Destinations Compendium 2010 www.globalservicesmedia.com

regional Dynamics Destinations of ChoiceFigure 3 Destinations of • Argentina Good scalability and capacity to provide multiple Service SegmentsChoice • Brazil Large domestic market, while having the best profile for scale in Latin America • Chile Mature and proven destination for high-value ITO and KPO processes • Colombia Robust infrastructure and talent pool for BPO & ESO. Risk perception is fast improving. • Costa Rica ITO remains a strong point, and has capitalized on Intel as an anchor client • Mexico Large labor pool, but currently experiencing domestic security issues • Paraguay Strategically located with potential to provide niche services. Scale is a concern. • Peru Rapidly evolving economy, offers capable talent at lower cost than competition • Puerto Rico Affinity to US political/business environment. Relatively untapped destination. • Uruguay One of the safest destinations, with rich and talented labor pool for ITO/KPO Services Source: Global Shore 2010 webinar ‘LatAm: The Enduring Promise of Latin America’ Offshore Nations: On Tholons Radar as future • Venezuela • Guatemala • Panama • El Salvador • Nicaragua around the natural resources. It has copper, it also has copper engineers. In a study of engineering market in the US to help export engineering services from Chile, Page 11 it’s a very huge untapped market.  Brazil – leader in the world in certain agri-business processes.  Challenges- • How to sell the region as a whole? • Where there are natural resources, there is a service associated with it. But this potential has been left largely untapped. • Central America needs to move away from manufacturing to services Conclusion: Challenges and Opportunities Challenges and • Key Accelerators Opportunities.  Potential to become Regional Service Cluster that can corner large US Hispanic market  Large, developing economies like Brazil, Mexico, Argentina will provide lucrative regional market for Outsourced Services  Multilingual capabilities can extend market reach to European markets  MERCOSUR and other trade agreements will be significant enablers  Better time-zone affinity to US and Europe compared to Asian destinations  Rapidly improving infrastructure and connectivity  Diminishing advantage in manufacturing (due to China and India) has led governments to focus on Services Industry  ‘Coopetition’ - Creating healthy competition with India through cooperation. Entry of large Indian and American Service Providers in the Region will accelerate Services Industry across Latin America • Key Inhibitors  Diluted Value Proposition: Most countries in the region offer similar value proposition - a unique positioning is critical for sustainable growth  Service Delivery Maturity: Needs to be improved to expand its high-value services portfolio.  Political & Economic Stability: Overly dynamic political landscape and fluctuating currency in specific countries are reasons of concern for many large providers. Source: Global Shore 2010 webinar ‘Europe: Showcasing the Challenges and Opportunities’ Page 1246 GS Destinations Compendium 2010 www.globalservicesmedia.com

regional Dynamics Q/AQ The cost of telecom and taxes in countries in LatinAmerica are sometimes restrictive, restrict moving projects from say, Chile to Colombia. Things to remember for intra- regional movement of projects like call center work? According to experts this is true if traditional modes of negotiating are followed.The way negotia- tion is done in Latin America is a little different. It is unfortunate to see tax retentions among countries. Brazil is withholding a lot of taxes. Global Shore 2010 Webinar Series Even within MERCOSUR (Uruguay, Paraguay, etc.), its not very easy to do business. However, hope should not be given up, as the infrastructure, the vendors are still growing and they are looking at the long term. So if you are large, if you are serious, you’ll get the deal youEurope: Showcasing need.Q Challenges and Opportunitiesthe Is there a country in Latin America which is setting itself apart in terms of specializing in help desk services? This is probably there in Central America. For mainframes and large systems its probably Brazil. Its difficult to pinpoint one which excels. Colombia is providing a lot of call(?) services but its still View Webcast growing. So in the future, Colombia would be a good place to start as prices are still low.Q There is a school of thought that locales within a continent or a large nation ought to focus and offer differentiated advantages for specific verticals, e.g, Financial Services, Semi-con work, to really attract the meaningful global anchor players. Is anything like that happening in Latin Am? Are clusters like Silicon Valley, Bangalore, HongKong-Shenzen, Shanghai-Hangzhou-Suzhou developing? Global Shore 2010 Webinar Series There are clusters emerging even in places like Mexico. Brazil, Uruguay and Buenos Aires is a very important cluster here. Paragauy, with Brazil and Argentina around it can provide services Perspectives and Potential of Asia’s in Spanish. The advantage is that such clusters are not consolidated, and are developing. That’s why there is a first mover advantage in Latin America right now. Hotspots: China and Philippines in Focus View Webcast Global Shore 2010 Webinar Series The Enduring Promise of Latin America View Webcast47 GS Destinations Compendium 2010 www.globalservicesmedia.com

WEBINAR SERIES: Rightshoring Strategies: Deriving Value, Defining SuccessGlobal Shore 2010 Webinar Series!WEBINAR SERIESGlobalShore 2010 is a webinar series on the dynamics of outsourcing locations meant forsourcing practioners and service providers to be able to make right decisions in choosingservice delivery locations.The webinars are jointly produced by Tholons, the globalization and sourcing advisory com-pany, and Global Services Media, the global media platform on the outsourcing industry.Webinar TopicEurope: Showcasing the Challenges and View WebcastOpportunitiesPerspectives and Potential of Asia’s Hot- View Webcastspots: China and Philippines in Focus View WebcastThe Enduring Promise of Latin AmericaLeveraging Africa & Middle East View Webcast View WebcastThe Top 100 Outsourcing Cities-2010 Jonathan De Luzuriaga Avinash Vashistha Ed Nair Managing Director, Manuel Ravago Chairman & CEO Editor SE Asia Research Director Tholons Inc. Global Services Tholons Inc. Tholons Inc. Fabrizio Opertti Senior Integration Brian Tumpowsky and Trade Specialist Mario Tucci Director, Sourcing Pumela Salela Inter-American Senior Global and Governance ITeS Consultant Development Bank Business Consultant Publicis World Bank (IDB) and Entrepreneur

� Choosing the Right Off-Shoring Destination 50 � Global Sourcing for FAO: Strong, Successful andby Atul Vashistha, Founder & Chairman, Neo Advisory Growing 68 by Stan Lepeak, Managing Director, EquaTerra Global Research� Compete or Cooperate? Bridging the Nearshore-Offshore Divide 53 � Why Latin America is Still a BUy 71by Anupam Govil, Founder and CEO, Global Equations by Mario Tucci, Senior Global Business Consultant� Rise of IT-BPO Outsourcing Frontiers Regional � Africa- The Next Outsourcing Frontier 72 by Dr. P.K.Mukherji, President & Managing Partner, Avasant AsiaAnalysis 56by Viral Thakker and Nishant Mathur, KPMG Advisory � Latin America Emerges as a key OutsourcingServices, India Destination for 2011 74 by Don Jones, Partner, Technology & Life Sciences Practice, BDO� Latin America: The Next Sourcing Frontier or an USAAfterthought? 59by Esteban Herrera, Senior Vice President, HfS Research � Africa as an Outsourcing Destination 76 by Pumela Salela, BPO/ITeS expert Consultant, World Bank� Africa: The emerging frontier for services � Offshoring in the Latin American Region 82offshoring 63 by Pradeep Udhas, Executive Director, IT/ITeS Sector, KPMGby H.Karthik and Nikhil Rajpal, Everest Group � India’s Global Expansion: Eyeing Latin America 83� Location Selection Best Practices 65 by Sumeet Chugani, Associate Attorney, Diaz Reus & Targby Jehil Thakkar and Shailesh Narwaiye, KPMG AdvisoryServices, India � Legatum Prosperity Index 84

expert Speak xperts by Atul Vashistha, Founder & Chairman, Neo Advisory Choosing the Right Off-Shoring DestinationWhile cost containment will continue to be an important factor inthe global sourcing decisions of organizations, other factors such asaccess to a global talent pool, new market entry, and geographic riskdiversification have become increasingly important.T he global outlook for out- organizations, other factors such as classified as personnel cost and opera- sourcing remains optimistic access to a global talent pool, new tions cost. Personnel cost in terms of despite the recent economic market entry, and geographic risk wages, administration cost, related HR crisis. Organizations continue diversification have become increas- cost accounts for approximately 40-50to adopt outsourcing as a business ingly important. New destinations percent of the total globalization cost.strategy and an effective optimization are constantly emerging in the global Operations cost is also another criticaland transformation lever, to help them marketplace. Organizations need to factor to be considered while setting-mitigate the current financial and com- be aware of the changing landscape up operations. Operations cost includepetitive challenges. As a consequence across the more established as well as office real estate rent, telecommunica-of increased adoption of outsourc- emerging destinations. tion cost, tax incentives, corporate tax,ing, the global sourcing landscape has travel cost, cost of electricity, and costundergone significant changes. Many Methodology & Work Process to set-up a business.global locations are now evolving to Six categories are critical to be ana-serve specific needs of organizations lyzed while choosing a location. 2. Service Maturityembarking on their globalization jour- Service maturity typically gauges theney or evolving as mature globalizers. 1. Financial Attractiveness relative capability of a location in the Global sourcing is now main- Cost saving has been one of the tradi- global sourcing landscape. The pres-stream. While cost containment will tional business drivers for globalization ence and type of services deliveredcontinue to be an important factor and continues to remain a critical by large IT and BPO companies is ain the global sourcing decisions of decision criteria. Cost, broadly can be leading indicator to gauge the maturity of a location. The market size of the S. No Location Factors Key Parameters outsourcing industry, multi-lingual capability, established and emerging Financial Real estate rent, support cost, corporate tax rates, labor 1 Attractiveness cost, HR cost, cost to start business, tax incentives services, industry specific focus are few factors that help provide a holistic Size of industry, presence of major IT & BPO companies, 2 Service Maturity multilingual capability, key services, industry specific view of service maturity of a location. services and focus 3 Human Capital Size of workforce, university graduates output, attrition 3 Human Capital rate, scalability, sustainability, wage inflation Global competitiveness is driving market growth across domains, and Number of ISPs, personnel computers, number of IT parks as organizations expand, the need to 4 Infrastructure and SEZs, airline connectivity, road infrastructure focus on core or anchor service capa- 5 Risks Crime rate, financial risk, labor risk, infrastructure risk, bilities becomes increasingly critical. geo-political and socials risk Human capital is the most critical Government support and incentives, social environment, success factor to retain and grow core 6 Business Environment quality of living, bureaucracy, cost and time to set up competence in the global services mar- business, cost of living ket. The availability of a well-educated,50 GS Destinations Compendium 2010 www.globalservicesmedia.com

expert Speakqualified labor pool, its scalability, and a futuristic evaluation parameter to be inflation and high productivity in thesustainability in a competitive envi- considered would be the educational labor market in a particular location.ronment are few key parameters to system that supplies appropriate qual- Numbers of university and technicalbe considered while evaluating this ity labor force to meet the forecasted graduates, attrition rates, size of IT &factor. While the above stated factors demand of the industry. Large num- BPO workforce are some of the factorsare specific to the current labor pool, bers of fresh graduates lead to low wage to be considered. Location Assessment Framework Examples Example 1: Critical assessment metrics analyzed while choosing a location from a current & future standpoint: Example 2: Cost Component Analysis – Location A51 GS Destinations Compendium 2010 www.globalservicesmedia.com

expert Speak Example 3: SWOT Analysis – Location A Example 4: Growth of 100000 Employees in Location A 80000 Cap Gemini E&Y ACS 60000 EDS HP Services 40000 20000 0 FY02 FY03 FY04 FY05E FY06E4 Infrastructure 5 Risk pool, a critical success factor for loca-With demand for sourcing of services A robust and pro-active risk moni- tions is the business environment andsurging globally, there is a definite toring system for global locations is the support system that it can provide.need for a well established infra- proving to be a key success factor for Business culture, quality of life, govern-structure adhering to global stand- sustainable business operations. Risks ment support, procedures, cost of liv-ards. Infrastructure would encompass such as labor risk, financial risk, secu- ing, and cost and time to commencephysical infrastructure like air, land, rity risk, geo-political risk, and social business in a particular location are keyand sea connectivity and related sup- risk are the different types of risks to aspects to be studied. Understandingport system, industry infrastructure be cognizant of while setting up new the business environment is a necessarylike development of technology parks, business in low cost locations. step for organizations setting up a busi-presence of Special Economic Zones ness operation within its own country(SEZs), and business infrastructure 6 Business Environment or outside. GSlike availability of office space, tel- While a location could be financiallyecommunication, and other related attractive, and mature in terms of serv- Founder & Chairman, Neo Advisory (Formerlybusiness support systems. ice capabilities with a sizeable labor neoIT), Neo Group52 GS Destinations Compendium 2010 www.globalservicesmedia.com

expert Speak xperts by Anupam Govil, Founder and CEO, Global Equations Compete or Cooperate? Bridging the Nearshore- Offshore DivideFor offshore BPO providers to succeed, they will have to tackle the Nearshoringchallenge.N earshoring is here to stay been slower at adopting this approach. such as Brazil, Chile, Costa Rica and the Americas region They have either been unable to find and Dominican Republic have rapidly is brimming with cost suitable mid-size acquisition candi- expanded their share of the outsourc- competitive and compe- dates or have been reluctant to set up ing pie. Brazil exported IT-BPO serv-tent destinations, each vying to be a grounds-up operation due to lack ices worth $2.2B in 2008 and is likelythe next big thing. But the loom- of familiarity with the region. It is to touch $3.5B by the end of 2010,ing question is, will these contenders increasingly becoming apparent that while Costa Rica exported aroundco-exist with the larger and more for offshore BPO providers to succeed $600M and Dominican Republicmature offshore destinations or is in this market they have to tackle the over $450M. In fact nearshore out-this a zero sum game? While many Nearshoring challenge. sourcing is expected to continue tohad initially dismissed Nearshoring grow annually at double digits toas a niche trend unlikely to compete Offshore to Global over $20B by 2013. The business andwith well entrenched offshore desti- The offshore provider landscape is service delivery infrastructure in thesenations, the success of many destina- rapidly morphing with the matur- countries has improved significantlytions in Central and Latin America ing of global sourcing. While serv- and is almost comparable to majorin attracting investments, providing ice providers are now expected to outsourcing destinations such as Indiaquality services and developing the offer seamless delivery of services and Philippines. However, apart fromdesired mix of skills have proven them across diverse geographies, it has also Brazil, none of the other nearshorewrong. More importantly, the need become important to shake off the tag countries have large locally ownedfor de-risking and diversification has of an ‘Offshore’ provider to mitigate vendors that can go head to headpropelled Nearshoring as a critical the political backlash. They can bridge with the global or India based serv-component of global sourcing. this perception gap by establishing ice providers. There is a distinct lack Service providers are adopting a a multi-regional presence, especially of transformational or multi-towerglobal strategy by developing new with a blend of onshore and near- outsourcing deals in the nearshorelocations that mirror client needs shore delivery. This is an imperative region due to relative nascency of theas well as address the saturation of not only for major providers like providers and a narrower set of skills.some offshore locations. Access to HCL, Patni and Genpact but also for But the potential is certainly there, ascapabilities not found offshore such the second tier companies wishing to is evident in the recent Cap Gemini-as Spanish skills and cultural affin- diversify their client base and spread CPM Braxis deal which is seen as aity are making Nearshore Americas risk away from highly concentrated bold move by the French firm to pen-an attractive choice. Most top tier offshore locations. etrate the lucrative Brazilian and Latinglobal ITO and BPO providers are American market. Aegis’ acquisitionexpanding their Nearshore footprint Bridging the Offshore- of Argentina based Actionline andeither through greenfield options or Nearshore Divide the recent acquisition spree by ACSthrough acquisitions. But the pure Capitalizing on their talent pool (xerox) and Teleperformance acrossplay offshore BPO providers have and nearshore advantage, nations the Caribbean and Latin America53 GS Destinations Compendium 2010 www.globalservicesmedia.com

expert Speakare indicators of a market that has becoming an integral component of don’t always portray the right picture.reached a critical mass. Such strate- a global services portfolio. Its impor- Many of the cities in Top 20 list alsogic transactions are rapidly changing tant to plan a Nearshore strategy with happen to be rated high in the Mostthe landscape and accelerating the long term objectives and a sustainable Dangerous cities list. Countries likematurity of services capabilities in the growth plan. Jamaica, South Africa and Colombiaregion. Balanced Approach to location are considered high crime, yet have a Global corporations are rapidly Selection – Its more than just the flourishing outsourcing sector. Createembracing Nearshoring, leverag- numbers: While Latin America offers your own decision matrix weighinging it for Comfort while expanding many nearshore choices, zeroing in on factors more important to you (andOffshore for Scale. Its easier to test the exact country or location is not as your clients) and then look for thenew processes, vendor capabilities simple. There is a surprisingly high right combination of skills availabil-and delivery models closer to home. variance in cost and performance fac- ity, process maturity, risks and costs.However nearshore vendors still have tors between various countries in this localization througha long way to go in building com- region. Once a company has short- Partnerships: the Americas (Latinplex service supply chains in a cost- listed a few locations based on broad and Central America) offers a siz-efficient manner. Hence companies parameters such as the nature of serv- able regional market for corporationsseeking strategic, transformative and ices to be provided, client require- and service providers. Countries inlong term deals overwhelmingly pre- ments and cost considerations, there this region have a healthy growthfer offshore destinations such as rate and mushrooming middleIndia, China or Malaysia. The class. However, tapping into thisopportunity for Nearshore ven- Aegis’ acquisition of market requires considerabledors is to offer a broader suiteof capabilities and scale through Argentina based Actionline local expertise and a long term approach. Local partnershipscollaborative partnerships with and the recent acquisition can prove critical in the successlarger offshore vendors. Hence of nearshore operations, espe-they can emphasize their core spree by ACS (Xerox) and cially during the initial stages.differentiators and strengths Teleperformance across the A Local partner can not onlyrather than build end to end ensure faster ramp up and accesscapabilities. The offshore ven- Caribbean and Latin America to infrastructure and manpower,dors on the other hand are seek- are indicators of a market that but they can also be the beach-ing to establish nearshore deliv- head to penetrate the local and/ery centers where client proc- has reached a critical mass. or regional market. This is espe-esses can be piloted and initial cially true in countries such astraction can be attained. Hence Brazil and Colombia where verya marriage of convenience can bridge has to be a more detailed drill down little English is spoken and businessthe Nearshore-Offshore divide. In this to identify the final location. Often customs can be quite different frompursuit everybody wins. The clients factors that are not reflected in an North America. A good example isfeel more comfortable with an off- Evaluation matrix may play a larger the recent JV between Datamatics ofshore provider that has a Nearshore role. For example, Worker produc- India and Genti Teleservices of Brazil.center, without sacrificing the process tivity and work ethics are not easily Genti benefits from Datamatics’maturity and cost efficiencies. The captured in Location reports and can expertise in non-voice BPO whilenearshore providers can embellish only be judged through site visits and Datamatics gains access to Genti’stheir strengths and close their capa- interviews with management from expertise in voice services, allowingbility gaps by bundling services with various groups (HR, Ops as well as the JV to offer a broader suite of serv-offshore partners. Sales). Government support is still ices to their client base in Brazil. critical in this region for long term The Right Business Model: ForIntegrating Nearshore into sustenance, however don’t be swayed small to mid-sized providers, near-the Global Services Supply by over the top incentives. Its more shoring should be approached withChain important to gauge the government’s caution as the market is still maturingWith the entry of global firms and efforts in ensuring skills development and a substantial amount of time andgrowing maturity of local service pro- and inflation control. Also, statistics resource investment is required. Atviders, Nearshoring is increasingly such as crime rates or country rankings the same time not having a nearshore54 GS Destinations Compendium 2010 www.globalservicesmedia.com

expert Speakpresence can limit a provider’s ability seamless business continuity plan. Hot local government and infrastructureto expand or bid on contracts requir- Sites, where the process is split across providers.ing such capabilities. Larger firms multiple locations, can be another As the boundaries betweenhave the flexibility to deploy capital reason for having a blend of nearshore Nearshore and Offshore continue toand resources and can often secure and offshore locations. Often providers blur, it is evident that clients will optclient commitment for testing the cross-train their employees across mul- for providers that have a blendednew location but smaller providers tiple locations to take over each other’s portfolio. Eventually providers will behave to get the business model right functions in the case of an emergency. measured by their maturity in leverag-the first time. Most large companies Alternatively one could sign up with ing the right location for the rightprefer setting up a greenfield opera- a nearshore partner who can provide skills with the optimum balancetion or acquiring an established local excess capacity when desired. between cost savings and perform-firm, while smaller firms should look Experts Matter: It is important to ance. Successful players will be theat entering into JV’s or Strategic bun- seek the help of advisors with sound ones who create a scalable network ofdling partnerships to minimize the knowledge of the region. Experienced global delivery by harnessing the com-risks involved in ramping up or inte- Advisors will quickly narrow in on the plementary strengths of Nearshoregrating nearshore delivery centers. short list of location choices based on and Offshore locations. GS Widening the breadth of Business their prior experience. They can alsoContinuity options. For mission crit- help facilitate and negotiate the right Anupam Govil is Founder and CEO ofical processes, it is imperative to have a incentives and cost package with the Global Equations. 27 January, New York “Other outsourcing conferences do not have a good mix of Buyers and Sellers. Most of the time it is lot of sellers. So I think, it’s a good mix, you get to hear from the buyers prospective which is very important” . -Global Services Conference 2010 Attendee Know More55 GS Destinations Compendium 2010 www.globalservicesmedia.com

expert Speak xperts by Viral Thakker and Nishant Mathur, KPMG Advisory Services, India. Rise of IT-BPO Outsourcing Frontiers Regional AnalysisShift in priorities in outsourcing strategies and exponential growth of theoutsourcing market has allowed newer offshoring clusters to evolve andflourish.I T-BPO outsourcing phenom- Emergence of new offshoring Cluster 1: Asia Pacific enon caught the imagination of destinations, each offering distinct Asia Pacific (ASPAC) is the most the industry at the turn of this combination of advantages and risks, dynamic and fastest growing outsourc- century. The y2k phenomenon has given the customer a variety of ing cluster. The rise of Asia Pacific asgave necessary impetus to the hiber- options to pick from. Though cost an outsourcing destination was led bynating outsourcing industry. In the arbitrage is a common advantage success stories of India, followed byinitial phase, availability of skilled among all the outsourcing clusters, China. Over the last few years, otherworkforce and cost arbitrage were the but parameters such as sustainability Asian locations such as Australia,primary drivers of outsourcing indus- and scalability of business, quality of Malaysia, Sri Lanka, Vietnam andtry. Asia Pacific region, which offered work force, cultural and linguistic Philippines have gained spotlight onboth, took the first movers advantage affinity, etc. have become differenti- global IT-BPO map.and emerged as the leading offshoring ating factors. The main parameters of influenc-supplier. Since then, IT outsourcing The table below lists out some of ing Asia Pacific as a choice of out-has become an essential part of every the objectives and priorities of the sourcing destination:corporate strategy. With experience, demand side of IT-BPO outsourcingthe corporate outsourcing strategies industry and advantages and capabili- Low Costs: Most of the Asian out-of businesses have matured to look ties offered by clusters of supply side. sourcing destination’s offer 20 percentbeyond mere cost arbitrage. Shift in We can categorize the outsourcing to 50 percent cost saving on laborpriorities in outsourcing strategies and clusters into three major categories over America and Europe. Availabilityexponential growth of outsourcing – a) Asia Pacific (ASPAC), b) South of vast skilled labor force at lowermarket has allowed newer offshoring America and c) Central and East cost gives Asia a massive advantage.clusters to evolve and flourish. Europe (CEE) Though wages have increased in India Objectives & Priorities advantages & Capabilities of Customers of Locations The cost reduction mandate Scalability Complexity of processes to be outsourced Specific skills and capabilities Cultural and linguistic alignment Cost of operations Degree of managerial control Similar time-zones Time-zone alignment Cultural affinity to buyer Figure 1: Factors affecting the choice of location for outsourcing (Source: KPMG Analysis)56 GS Destinations Compendium 2010 www.globalservicesmedia.com

expert Speakdue to inflation, yet they are consider- Main parameters influencing South alternative as compared to the U.S.ably lower than that in Unites States America as a choice of outsourcing and Europe.of America and Europe. destination: Cluster 3: Central andLanguage skills: India, Philippines Near shore and Time zone align- Eastern Europe (CEE)and Malaysia have leveraged large ment: South American nations have Preference of West European com-English speaking population to attract the unique advantage of proximity panies to near-shoring and culturalkey US and European markets. Asia to the biggest hub of outsourcing and linguistic similarities has madePacific markets – Japan, Taiwan supply end – USA. Near-shore opera- Central and Eastern Europe a viableand korea find China, Malaysia tion offers advantages of time-zone outsourcing destination. Bulgaria,and Vietnam lucrative for regional alignment, faster implementation and Hungary, Poland and Russia are alllanguage skills and cultural affinity. better control over operations. set to compete with Asian and SouthThe region has struggled to capture American counterparts for the WestNon-English European market due Language skills: Spanish language European outsourcing market.to absence of Spanish, French and requirements in the U.S. and the Main parameters influencingGerman speaking work force. growing English language capability CEE as a choice of outsourcing destination:Large number of service provid-ers: The large number of indige- The outsourcing story will Language skills and culturalnous service providers offer wide affinity: Language skills arechoice for buyers looking to out- become really interesting important, and are often usedsource to Asia Pacific countries. when Egypt and some other as a selling point by the near-It also makes the region very shore destinations in the CEE,cost-competitive. African countries also actively especially to Western European join the IT-BPO outsourcing countries like Germany andexperience and Maturity: Rich France.experience in outsourcing indus- bandwagontry has given India the deliv- Wage differential: In the newery maturity of offering end- EU states labor costs are near-to-end solutions. It gives them edge of the labor pool in the region are ly 20 percent of those in Germanyover their counterparts. Malaysia and key to the region’s competitiveness. and France. Wages in countries likePhilippines have emerged as strong Mexico, Argentina and Costa Rica are Romania are one-tenth of those ofoutsourcing destinations because of capitalizing on their sizeable pool of their European counterparts. Thethe availability of workforce with English speakers by offering bilingual wage differential, even though it isniche skills, whereas China based sup- services. considerable today, is narrowing aspliers are also growing rapidly wage growth in the region is rising. Cultural affinity with the U.s.: USACluster 2: South America and Latin America share a number eU regulation: Since most of out-Though South America has less than of cultural similarities. These aspects sourcing destinations including10 percent share in global outsourcing of cultural affinity assist the U.S. Hungary and Poland, have joinedmarket, yet the region shows prom- and European companies to retain a EU, European customers find Eastise. With better economic stability, similar corporate culture in captive European outsourcing destinationthe “near shore” advantage of South centers and facilitate business with more regulated then their AsianAmerica has become more compel- outsourcers. counterparts. It shifts some of theling for the United States of America. regulatory responsibilities towards theBrazil, Mexico and Chile reaped the Cost Attractiveness: Latin America vendors. Schengen visa and adoptionbenefits of the first mover advantage has a significant cost advantage over of Euro as a common currency hasand business maturity. Newer desti- Europe and U.S. Chile and Mexico also played its part in strengtheningnations such as Argentina, Uruguay are relatively more expensive loca- CEE cluster.and Costa Rica are becoming viable tions as compared to Costa Rica andoptions due to attractive cost and Argentina, however these regions standard of education: Most CEEmaturing business sector. can still provide a cost-competitive countries have superior educational57 GS Destinations Compendium 2010 www.globalservicesmedia.com

expert SpeakFigure 2: Analysis of Outsourcing Clusters Cluster Parameter asia Pacific Central and Eastern Europe Latin america Major destinations India, China, Philippines, Malaysia Ukraine, Romania, Czech Republic, Brazil, Chile, Mexico, Argentina Poland Upcoming destinations Vietnam, Thailand, Sri Lanka, Slovakia Paraguay, Peru, Columbia, Equador Pakistan Closest markets Japan, Korea, Australia, India, China Western Europe US, Canada Service Focus Global markets European markets North American markets Reason for emergence as • Low costs • European language skills • Spanish language skills a cluster • English language skills • Educated workforce • Cultural affinity with American • Relatively mature service providers • Good infrastructure markets Emerging areas of • Vertical BPO • Technology services • Contact center opportunity • Knowledge services • BPO • BPO Note: The table contains indicative data and may contain generalizations to enable comparison across regions. However, there are disparities within regions on each of the above parameters, some of which are highlighted in following sections. Source: KMPG Analysissystems that are almost at par with outsourced has extended from “voice state-of-art infrastructure and costthe EU-15. A study by MGI claims based” services to insurance under- effective work force. With the adventthat 50 percent of graduates (engi- writing. At the same time, new clus- of tier two outsourcing cities, custom- 27 January, New Yorkneers, mathematicians, statisticians ters have made the outsourcing market ers get several options even within aand physicists) from the Czech extremely competitive. Suppliers need country.Republic, Hungary or Poland are to continuously evolve and innovate From y2k to global recessions,suited to working for international to attract customers. For instance, outsourcing has come a long way. Theservice“Other outsourcing conferences inflation and increase in wages ofspread of and Sellers. destinations providers. despite do not have a good mix Buyers outsourcing Emergence of new clusters lot of sellers.estate think,Indiaaisgood mix, you threeto hear from been the Most of the time it is has and real So I prices, it’s still the across get continents hasresulted into increase in length and most preferred destination .because of biggest leap. But this can prove to be the buyers prospective which is very important”breadth of outsourcing. The inhibi- maturity of industry in India and sup- just a beginning; the story will become Know More -Global Services Conference 2010 Attendeetions and reservations against IT-BPO port extended by the government and really interesting when Egypt and fewoutsourcing that existed, due to differ- promotional agencies. other African countries also activelyent priorities of customers, have been Regional analysis gives hawk-eye join the IT-BPO outsourcing band-diluted considerably by emergence of view of outsourcing destinations, wagon. GSnew destinations. Outsourcing has but each of the regions also offersbeen embraced by more customers large diversity to the customers. For Viral Thakker is Executive Director, KPMGacross geographies. With availability instance, in Asia, India offers mature Advisory Services, India. Nishant Mathurof diverse technical and profession- IT-BPO industry and English speak- is Consultant, KPMG Advisory Services,al skills, the breadth of work being ing workforce where as China offers India 27 January, New York “Phenomenal & an Excellent platform to meet lot of clients and other people from same industry. Good exchange of thoughts and ideas. I would definitely come back year after year and would highly recommend people out there to come and participate” . -Global Services Conference 2010 Attendee Know More58 GS Destinations Compendium 2010 www.globalservicesmedia.com

expert Speak xperts by Esteban Herrera, Senior Vice President, HfS Research Latin America: The Next Sourcing Frontier or an Afterthought?Nearly every provider of IT and Business Process services has wrestledwith a Latin American Strategy. The strategic question : Is Latin Americaa destination of choice, or a destination of convenience?I n Spanish, the word “servicial” is destinations do. But viewed compre- some of the well-know near-shore a high compliment. It describes hensively as a region, it’s a formida- advantages of similar time zones, a person who is always ready to ble services population, with millions quick, relatively cheap flights, and lend a hand, who senses what of qualified engineers, accountants, most importantly, cultural similaritiesothers need before they even ask. HR professionals, MBAs, doctors, with American and European clients.Parents teach the concept to their lawyers, etc. and Billions of dollars However, the outsourcing industrychildren, in hopes that they will devel- in demand for IT and IT-enabled here is not as mature, relying on hero-op this behavior. Providing a service services ($8 Billion in Brazil alone). ics and creativity more than processin Latin American culture is noble Latin America desperately needs, but and discipline.and prestigious—so how is it that it probably will not get, a NASSCOM- The strategic question for both pro-is not the business services engine of like organizing body that will refocus viders and buyers: Is Latin America athe world? the industry away from its current destination of choice, or a destination Nearly every provider of IT and nationalistic tendency. It could start of convenience?Business Process services has wrestled with the already commercially friend-with a Latin American Strategy. On ly Mercosul countries and perhaps Latin America as aone hand, it is a large, relatively pros- expand northward as it proves its destination of choiceperous market with a wealth of well- success. Companies on either side of the serv-educated professionals. On the other, Possibly the best-kept secret is the ices equation that see Latin Americait is highly fragmented and diversely abundance of English language skill as a unique and differentiated propo-regulated; as a result, it has been dif- available in the region. For both voice sition will seek to leverage the culturalficult to scale. Another difficult choice and non-voice services, Latin America familiarity bred by the outsize influ-for service providers is focus: are we is competitive with, or superior to, ence of the United States and Westernbuilding for the local market or to most of the usual offshore back-office Europe on Latin American Society.provide offshore/nearshore services? destinations when it comes to work- This has something to do with colo-The two options require very differ- ing in English. HfS Research toured nial history, economic power, politicalent approaches, and therefore it is a call center facility in Nicaragua not influence and aid, and shared Judeo-difficult to do both successfully at the too long ago, and found over 120 Christian foundations for legal andsame time. representatives placing outbound calls social structures (though the region Perhaps the biggest limitation to in perfect, nearly unaccented urban is increasing in religious diversitydate has been the inability of the American English. Over 80 percent quickly). But it has even more to dolocal industry to organize regionally. of these young employees had lived with a shared experience and popularIndividual Latin American countries in the United States at some point in culture. Latins who were teenagerslack the population to offer the scale their lives. in the 80s remember when “Videothat more established Asian offshoring Of course, Latin America boasts killed the Radio Star” inaugurated59 GS Destinations Compendium 2010 www.globalservicesmedia.com

expert SpeakMTV broadcasting, at exactly the Aggressively promote these advan- the companies that can afford to fol-same time as in the US. Cable sub- tages and how they translate into low a “convenience” strategy are thescribers throughout the entire region real business value ones that do not have a large com-have more foreign (and mostly � Carve out new niches that fit mercial presence in the region—theyAmerican) channel choices than they well—Application maintenance lack the language and culture-specificdo Spanish-language and local choic- is mature and well supported by requirements of companies with largees. While there is a vibrant inde- other regions. But GUI design, footprints in Latin America, and theypendent film industry in nearly every for example, has a cultural appeal are not large enough or “outsourced”Latin American country, Hollywood element to it and is a strong enough to require the portfolio diver-rules the cinemas. For all of Brazil’s niche for Latin American provid- sification. Service providers of anycompelling music, visit one of Sao ers. Focusing on the services that scale are unlikely to have no cus-Paulo’s famous “boites” and you are are best provided from the region tomers with local requirements, bemost likely to hear Euro-pop mixed can only help they due to commercial need or geo-by Europe’s top disc jockeys. Bottom � Lobby local governments for less graphic diversification. However, ifline, Buenos Aires looks and feels a lot restrictive service export policies the demand is not large, one or twomore like Boston than Bangalore. and tariffs—and reward the loca- medium sized delivery centers will Outsourcing is ultimately about tions that embrace pro-business suffice.providing services in a way that cre- regulatory environments Latin American service strate-ates economic value for both parties. � Invest in local leadership gies that are more opportunistic willCultural understanding can certainly � Compete vigorously in the local probably emphasize the followinggrease the wheels of the relationship, market and the global service elements:but without an economic incentive, delivery playing fields to miti- � Site choices that reflect broadthere is little reason to proceed. Latin gate risk and enhance economic language and regional capability.America still does offer labor arbitrage benefit Since there are likely to be lessfor desirable skills, but it is fading sites and a smaller footprint overjust as quickly as anywhere else. On Latin America as a a large expanse of the map, com-a pure labor rate basis, Latin America destination of convenience panies are more likely to chooseappears disadvantaged relative to India While the regional, all-in approach areas like southern Brazil, where itand the Philippines, for example. But may well be right for many providers is easier to recruit bi- and tri-lin-on a total cost of ownership (TCO) and clients, but it isn’t for everyone. gual speakers. Where companiesbasis, that disadvantage shrinks. HfS For some enterprises and their provid- have a specific large market to beresearch estimates the difference in ers, a more opportunistic approach to served, such as Mexico or Brazil,TCO at no more than 10–15percent Latin America is more appropriate. companies may choose sites orbetween most Latin America activ- Simply put, some companies do not providers with local strengthity (whether IT or BPO related) and have the demand for services delivered � Niche activities—certain kindsIndia-originated services. from Latin America, because their of application development, bi- customers and their business doesn’t lingual contact centers, kPO, andCompanies that see Latin America require it. These companies will likely sports books, among others, areas a destination of choice will logi- take advantage of niche expertise, all reflected with relative strengthcally invest more heavily, and their and the ability to provide “localized” in the regionstrategies should reflect the following services when their limited presence � Customer acquisition, in theelements: in the region demands it. A few oth- case of providers. There are still a� Adopt a regional, networked ers might view Latin America purely number of captive shared service approach, rather than a country- as a diversification move, a nearshore centers in the region that could be by-country approach. Make sure minor site wih disaster recovery capa- sold to providers looking to win a work is easily movable from one bilities and a beachhead for potential new customer. location to the other, and get future expansion should the situation � Portfolio diversification/Disaster skilled at capturing the right skills change. Recovery. Companies that find in the right cities This is probably the more difficult themselves too heavily invested in� Make the cultural similarities strategy to execute, because it requires a single region may find it attrac- and the physical proximity part making riskier choices about location tive to conduct some business of the differentiated advantage. and focus. Amongst service buyers, activity in Latin America, taking60 GS Destinations Compendium 2010 www.globalservicesmedia.com

expert Speak advantage of its labor arbitrage investment away. In truth, the parts of the industry but not oth- while managing business risk. security situation is far better than ers. Most countries, even as they� Marketing and Sales: Ultimately, it has been, not just in Colombia attempt to attract foreign invest- service companies cannot call but throughout the region. The ment, trip over their own bureauc- themselves global if they ignore concerns over security are, in HfS’ racy. Fortunately they have all set 22 million square kilometers of opinion, overblown. Philadelphia, up government-sponsored devel- the earth’s surface, with a popula- Washington D.C. and Baltimore opment agencies skilled in help- tion of 600 million. Establishing are just three of the cities in the ing new entrants get established. a presence in Latin America is United States with higher murder critical to service providers and rates than Sao Paulo. Buenos Aires Service Provider Landscape: consumers that need to compete is safer than Dallas. Approaches to the market globally. 3. population/scale. The main prob- Different service providers have taken lem with single-country strategies different approaches to Latin America,The Challenges of the Region is that no one country in the and even within a category, the strate-While there are many more reasons region, with the possible excep- gies have differedto invest in Latin America than there tions of Brazil and Mexico, has a Traditional Western outsourcingare reasons to avoid it, there are some huge population, therefore limit- providers such as Accenture and IBMchallenges for business service have long had a presence serv-providers and their customers in ing the local market. Because ofthe region: Cultural alignment is the their country-specific organiza-1. politics. Led and funded tion structures though, it has by Hugo Chavez’s regime strongest calling card for the only recently become possible in Venezuela, leftist, anti- companies wishing to provide for them to offer the services of business and anti-American/ their Latin American delivery European governments have services from the region, but centers to non-Latin American been elected in places like they must resist the tempta- clients. CapGemini has perhaps Bolivia, Ecuador, Nicaragua, the most aggressive investment and Argentina. While the tion to “sell against India.” program in the region and has threat to foreign businesses backed it up with acquisitions, is real, it is also overstated. like the recent CPMBraxis All of these countries require for- ing the actual and potential edu- transaction, and leadership to make eign investment, and still actively cated workforce capable of pro- it happen. All of these have local lead- pursue it in spite of the politi- viding services. Costa Rica, which ers running the operation, generally cal rhetoric their leaders promote. has the most educated population reporting to the home office in the Brazil has grown economically, on the continent, has just four US or Europe. grown its middle class, expanded million inhabitants, 300,000 of Contact Center Providers were capitalism and foreign investment, them already working in the serv- early and heavy in the region, for and gained more influence in the ices-for-export industries. Chile, reasons mentioned earlier. Sykes, region and the world in the last with a stable democracy, strong for example, operates in Argentina, eight years, ostensibly under the infrastructure, and the highest Brazil, Costa Rica, El Salvador, and leftist leadership of the Worker’s per-capita income in the Americas Mexico. Sitel is in Brazil, Chile, Party, which was just re-elected to after the US and Canada, has just Colombia, Nicaragua, and Panama. the presidency for another four- 16 million inhabitants. Both of West is a relative laggard with just one year term. the above have proven difficult large Mexico operation. Call Center2. Brand. Colombia has some of places to recruit in for recent cor- management is a highly poached job the best professional talent in porate multi-national arrivals. category in the region, but because of the world, available at reason- 4. Regulation. Latin America has their prevalence and experience, there able wages and within a short not helped itself with a consistent are plenty of local managers running flight from the United States. But policy for services exports. While these contact centers. Colombia has a terrible repu- Brazil taxes them, Nicaragua offers The largest Indian ITES provid- tation as a violent, dangerous a 15-year tax holiday. Panama ers have all established a presence in place that keeps a lot of foreign offers similar holidays for some Latin America, generally following an61 GS Destinations Compendium 2010 www.globalservicesmedia.com

expert Speakeither build or buy strategy, but not brands mentioned previously. They executives of larger firms could notboth. Wipro has made some strate- have had the opposite problem of give them. More than any other con-gic investments in which it acquired the India-based firms. They know stituency, this group of providers hasboth desirable assets and marquee and serve their home-market very an interest in promoting the region ascustomers. TCS moved early and has well, but they have struggled with a destination of choice, particularlymostly built. Infosys has been charac- enterprise-level selling in the US and for high-end software services.teristically cautious and opportunis- Europe. For obvious reasons, all oftic. HCL and Cognizant arrived late these firms have chosen a “destination The bottom lineand do not have as large a presence as of choice” strategy. They have a com- Outsourcing in Latin America willthe others. Both WNS and Genpact pelling near-shore value story to tell, continue to grow, in part because thehave built and bought in the region. but are far behind in awareness and region can serve many different typesThose India-based providers that don’t market share. HfS Research sees the of demand. Cultural alignment is thealready have a presence are talking immediate challenge for these firms as strongest calling card for the compa-about it, with commitment to getting sales and marketing, but longer term, nies wishing to provide services fromestablished sooner rather than later. they must also establish themselves as the region, but they must resist theHfS has observed that the India-based true global providers, meaning they temptation to “sell against India.” Thefirms are having difficulty engaging too will have to come to places like business services industry is, at thislocal clients, perhaps in part because India, The Philippines and China stage of globalization, much less athey have largely failed to hire local if they are going to be a full-service competition amongst countries thanleaders to run their shows. One senior provider. They will also have to invest it is a competition amongst compa-executive from a large and successful in BPO capabilities, as they are largely nies. Consumers of business servicesprovider recently remarked to HfS IT focused and HfS Research sees a have a choice of locations and provid-Research that “Portuguese/Spanish slow but consistent swing towards ers, and as they seek to both diversifylanguage skill and cultural under- bundled, end-to-end services over the risk and integrate services, Latinstanding” were not that important next few years. America will continue to be a keyto lead the Latin America business. yet another category of provider is ingredient in the recipe. Whether theThis sounds a lot like the American the smaller, high-end Latin American region plays a dominant or secondaryglobalization failures of the 1960s software development outfit—compa- role in the sourcing strategies of enter-and 70s, in which US corporation nies like Hexcta, Avantica, and PSL, prises and providers, expect to seedispatched ex-pats to run far-flung with deep expertise, smaller project continued, paced, growth in both theoperations with little regard for local based work as their main offering, local and export markets. And whylanguage, customs, preferences, cul- and more midsize than enterprise- not harness the energy of a cultureture and regulation. class clients. Their clients find work- that prides itself on providing a serv- Large local providers, like Softtek, ing with them easy, for the nearshore ice? GSNeoris and Politech, have established advantages described elsewhere in thisbusinesses in the US, but their pen- report, but they also tend to get Esteban Herrera is Senior Vice President,etration is small relative to the the a lot of personalized attention that HfS Research 27 January, New York “Other outsourcing conferences do not have a good mix of Buyers and Sellers. Most of the time it is lot of sellers. So I think, it’s a good mix, you get to hear from the buyers prospective which is very important” . -Global Services Conference 2010 Attendee Know More62 GS Destinations Compendium 2010 www.globalservicesmedia.com

expert Speak xperts by H.Karthik and Nikhil Rajpal, Everest Group Africa: The emerging frontier for services offshoringAfrica’s growth in offshoring has been primarily driven by its low-costproposition and talent availability in meaningful scale. However, Africa isoften perceived as ‘high-risk’ by foreign investors.Here, the continent isanalysed across key decision drivers in location selection.T he offshoring of global servic- selection, namely talent availability, constitute the majority of the es is an established phenom- costs and operating risks. Francophone offshoring market. enon. In 2009, over $90B of Most offshore operations in these services were sourced across Meaningful scale of talent countries support clients and cus-BPO and IT through ~4 M people available in many countries tomers in France and pan-Euro-from offshore locations. Everest analysis suggests that at least pean multinationals having signif- As demand grows, the offshore four countries in Africa provide icant French-language needs. Forlocation landscape is evolving rapidly, talent in meaningful scale to sup- example, Capgemini has a ~1,500with over 150 cities that are potential port large operations (in excess of FTE strong operation in Moroccolocation options for companies. Africa 1,000 FTEs). Egypt, South Africa, providing French-centric IT appli-is a relatively recent entrant to this list Morocco and Tunisia each produce cation development, transactionalof potential destinations. The region more than 50,000 graduates annually. BPO and contact center serviceshas witnessed significant uptick in South Africa, for example, produces to its customers.offshoring activity in the past 24-36 350,000 graduates annually and is � English language belt in sub-months. Recent investments by lead- among the Top 3 global locations Saharan Africa: Primarily com-ing global companies (e.g., Amazon that can provide English language prising South Africa with kenyain South Africa) are likely to favorably skills at scale. While the size of tal- also starting to gain traction,influence interest in the region as a ent pool in these countries is smaller these countries primarily deliverglobal sourcing destination. than the established offshore locations English language BPO services. Among the African destinations, (India, Philippines), it is comparable South Africa is one of the lead-Egypt, Morocco, South Africa, and to that of emerging offshore locations ing destinations to serve the UkMauritius are the leading countries in in Central and Eastern Europe, Latin market, given its preferred accentterms of scale of direct employment America. Other African countries and cultural affinity with the Uk.in the offshore services sector. Each of such as kenya, Ghana and Mauritius Five of the top 10 global contactthese countries has more than 10,000 can support moderate-scale centers. center players are already leverag-offshore jobs in this sector and host Historical influences from the ing South Africa to deliver voicedelivery centers for a number of lead- colonial era have provided these coun- work for the Uk market.ing global suppliers and captives. tries with a pool of language skills � Multi-lingual destinations Africa’s growth in offshoring has that are a key driver towards growth for Europe: Some countries inbeen primarily driven by its low-cost in offshoring. Given the diverse lan- Africa can support service deliv-proposition and talent availability in guage skills in the region, we see three ery across multiple languages.meaningful scale. However, Africa “belts” emerging: Mauritius offers an attractive bi-is often perceived as ‘high-risk’ by � Francophone belt in North- lingual proposition for Frenchforeign investors. In this article, we Africa and Mauritius: Primarily and English work. Egypt is wellexplore key African countries across comprising Morocco, Tunisia positioned to support multiplethree key decision drivers in location and Mauritius, these countries European languages at moderate63 GS Destinations Compendium 2010 www.globalservicesmedia.com

expert Speak scale and has witnessed credible infrastructure). Whilst perceptions violence and unrest in Nigeria and success to the effect. of risks in some areas are exagger- Senegal. ated, there are some challenges that Governments are making concertedCosts significantly lower investors need to consider and man- efforts and strong commitments tothan source markets; age effectively. Also, these risks vary improve the attractiveness of the oper-however, costs vary across across countries and investors need ating environment. Initiatives includelocations to make conscious risk-reward trade- skill development (e.g., ITIDA-ledLocations in Africa offer significant offs in making location choices in the programmes in Egypt, Monyetla pro-arbitrage potential from source mar- region. gramme in South Africa) and acceler-kets. For example, costs in South ating infrastructure developmentAfrica are 50-60 percent lower through technology parks (e.g.,than the Uk. Also, most loca- While the size of talent pool Casanearshore parks in Morocco,tions in Africa offer lower costs Ebene Cybercity in Mauritius).than the Central and Eastern in these countries is smaller Most countries offer incentivesEuropean region. than the established offshore for the offshoring sector; howev- However, costs vary signifi- er, the nature of these incentivescantly across locations. Whilst locations (India, Philippines), and their financial impact varieskenya, Mauritius and Egypt are it is comparable to that of across countries.among the lowest cost destina- On the whole, the outlook ontions in the region, Tunisia and emerging offshore locations the offshoring opportunity forMorocco are among the moreexpensive ones. Some countries in Central and Eastern Europe, Africa is positive. We expect that growth will continue to acceler-offer attractive incentives that Latin America ate as both suppliers and buyersmake a significant difference build global delivery networksto the cost of operations. For and diversify into newer loca-example, the recently announced From a relative risk standpoint, the tions. In addition to growth from(Nov 2010) incentives in South Africa region can be segmented into three international markets (e.g., Uk),help reduce costs by 20percent. groups locations in Africa are also likely to Whilst payroll and facility costs � Egypt, Morocco, Tunisia and witness growth from regional sharedin African countries are in general Mauritius are stable locations services operations (i.e., leading com-competitive to India and Philippines, on account of a favorable geo- panies consolidating their back-officetelecommunication costs are higher. political climate, socio-economic operations for the African region).This is largely driven by historical regime and investor-friendly busi- Furthermore, the expected improve-telecom bandwidth constraints. On ness environment ments in infrastructure augur well foran average, the cost of telecommu- � South Africa offers a “First- the future of this region.nications in African countries is 5-7 World” environment in terms of Most of the work delivered fromtimes higher than that in India and its infrastructure and quality of African markets is currently transac-Philippines. However, telecoms costs life. Investor confidence in South tional in nature. While this is expectedhave reduced considerably over the Africa has grown in recent years to continue, some countries offerpast 3-4 years. Going forward, the and the success of the FIFA 2010 opportunities to deliver complex workadvent of new cables (e.g., SEACOM) World Cup has further strength- in certain areas (e.g., South Africa foris expected to further reduce telecom ened the country’s reputation. complex BPO in financial services,costs and strengthen cost competi- However, there are some concerns Morocco in applications outsourc-tiveness of several countries in the on security that can be managed ing). The political and security envi-region. with appropriate investments ronment may continue to remain a � Instability of the political and concern in few countries but investorsConcerns on risks are a macro-economic environment is a are finding ways to manage risks asblend of real issues and concern in some countries such as they enter these markets. GSperceptions; risks can be kenya, Nigeria and Ghana (e.g.,managed unstable coalition and burgeon- H.Karthik is Vice President, Global Sourc-Investors are often concerned with ing economic debt in kenya). In ing, Everest Group. Nikhil Rajpal is Partner,risks in Africa (e.g., stability, security, addition, there are concerns with Everest Group64 GS Destinations Compendium 2010 www.globalservicesmedia.com

expert Speak xperts by Jehil Thakkar and Shailesh Narwaiye, KPMG Advisory Services, India Location Selection Best PracticesThere is no ‘one-size-fits-all’ strategy for organizations to choose butthey need to follow a planned and scientific exercise of location selectionT he recent financial crisis gave cities is well established and quality of stakeholders need to ask few impor- a big set-back to the world life is also better. However, such cities tant questions to themselves before and a lot of companies are have higher costs of operation and finalizing the location to see if they still grappling to recover. higher attrition rates. are moving in the right direction.One big lesson that companies havelearnt is that they can no longer exist emerging Tier ii locations are cities 1. Is a clear Sourcing strategyin isolation. The world is getting clos- which started little late after watch- defined?er and every global phenomenon will ing the success of some of the leading Organizations that are planning tobe impacting companies. Companies destinations. These Tier II cities have explore new/alternate destinationswhich had never considered outsourc- large talent pool with relatively lower need to have a clear sourcing strategying are opening up to offshoring wages. Overall cost of operations is defined. Having a detailed sourcing/ outsourcing to rationalize costs also low in these cities. However, strategy not only gives a business caseand delivery models. On the whole, infrastructure in these cities may not and a plan for the next few years foraccess to global opportunities is get- be sufficient to cater to the demands offshoring but also gives a completeting easier. Offshoring not only helps of the companies, but attempt is idea of the requirement. It also out-in cost rationalization but also gives being made to improve the situa- lines future plan as to which processesaccess to a diversified talent pool. If tion. Governments are focusing on are ideal to offshore, how to offshorecompanies move to a relatively less development of city infrastructure and when to offshore them. This is aexplored location, they can leverage and providing suitable incentives to very important aspect from locationmany additional benefits of being the set-up IT-BPO companies in these selection point of view because it gives“first-mover” like acquiring various locations. a clear idea about the scale and scopeincentives such as government grants Considering the gamut of choices of services. It also helps to choose adue to a heavier hand at the negotia- in terms of cities that are available, it location by keeping in mind abouttion table. becomes difficult for organizations to the future expansion plans. Globally, several destinations are choose the right city. Organizationsattracting IT-BPO players to set-up are increasingly looking at parameters 2. What kind of time-zonetheir delivery center. Depending on beyond cost arbitrage. Both Tier I and proximity and support is expectedthe strategic priorities, companies can Tier II cities will have their own pros from the new location?choose between two types of cities, and cons and companies want be sure Organizations should also be clear onLeading Tier i or emerging Tier ii. that they have chosen the best city to nature of support they are expecting fit the bill. Ultimately, location selec- from the offshore location. DependingLeading Tier i locations are early tion is a scientific exercise and should on the requirement, the center can bebloomers in IT-BPO sector and are be done with utmost care otherwise a near-shore or an offshore center.quite mature in service offerings. one may end up in a place where If there is a good amount of timeMoreover, due to presence of large one gets a few advantages but does overlap with the parent office then fornumber of service providers and cap- not meet overall objective of moving the work to be carried out smoothly ative units in the city, skilled talent offshore. Location selection should near-shore center within time differ-pool is large. Infrastructure of these be done with extreme caution and ence of 3-4 hours can be ideal. E.g.65 GS Destinations Compendium 2010 www.globalservicesmedia.com

expert SpeakMexican and Chilean cities can be a be executed from the location, one nearby markets. E.g. Chinese citiesgood option for US head-quartered should look for suitable talent pool. like Changsha and Hangzhou can becompanies. Offshore centers can be For some of the transactional work, a natural choice to support Japaneseconsidered for large scale operations overall graduates’ pool can be consid- market due to their linguistic andwith minimal/no overlap with par- ered, but for certain high end com- cultural similarities. The Central andent offices. In such cases, Indian and plex processes, looking at specific East European cities are good toChinese cities can be a good option talent pool becomes essential. E.g. support Western Europe; the Latinfor US head-quartered companies. Commerce graduates can be consid- American cities are good for NorthCompanies can also go for regional ered for accounting process related America, etc. However, there are somecenters under ‘Follow the sun’ strate- work. Apart from the proportion of interesting anomalies. E.g. Buenosgy. In which case regional centers will graduates, other factors which could Aires (Argentina) can tap both Northtake support charge during regional impact the availability of talent pool American and European business dueoffice’s ‘office hour’ timings. Other are out-migration of talent and com- to linguistic similarities with bothchoice can be ‘24*7 offshore support’ petition available from other/compet- regions (Spanish, Portuguese andmodel in which the offshore center ing industries. E.g. The call center English). Similarly, accent similaritiesalways supports the required with the US mean that cities inservices. the Philippines are well suited Some cities have set up areas to serve the US market.3. Will an unexploredemerging Tier II location be for promoting specialized 6. Is there a dedicateda good choice for operations? services – like the Gujarat IT-BPO InfrastructureTypically, moving to unexplored available within the city?Tier II cities will have all the International Finance Tech- Availability of dedicated zonesadvantages of being ‘first-movers’ City in Ahmedabad (India) and for IT-BPO companies withfor large transactional work cent- ready basic infrastructure anders. State and local Governments the Tunis Financial Harbor facilities (such as power andwill be ready to provide incen-tives for new set-ups. Talent pool in Tunis (Tunisia) are to be telecommunication) can be of good help while deciding on awill also be easily available and dedicated for financial serv- delivery location. Large numberat a lowest possible cost in initial of cities have Free trade zonesyears. Although, in those initial ices, Changsha (China) has a (FTZs) or special economicyears infrastructure may not be “Cartoon City” to house ani- zones (SEZs), which can beadequate but over the period if ideal for IT-BPO companies.few good companies set-up in mation companies Some cities have gone a stepthe city, infrastructure would be further and set up areas for pro-automatically improved to sus- moting specialized services – fortain the growth. Hence, if companies industry faces competition from instance, the Gujarat Internationalare ready to compromise a few aspects the tourism industry in some cit- Finance Tech-City in Ahmedabadof location, their ‘high Risk – high ies. Moreover, if there are industry (India) and the Tunis FinancialReturn’ strategy surely can provide clusters in nearby areas, typically a Harbor in Tunis (Tunisia) are tothem better benefits in the unexplored higher level of professionalism can be be dedicated for financial services.tier II location. But if companies are expected from the talent pool and can Changsha (China) has a “Cartoonlooking at setting-up a center for be employable. City” to house animation companies.niche skills, a careful decision needs For companies which are looking forto be taken between established Tier I 5. Does the location have niche services, cities with dedicatedcity verses unexplored Tier II city. linguistic and cultural proximity? infrastructure and specific talent avail- Services which largely require cus- able can be of natural choice4. How good is the talent pool tomer interaction, possessing linguis-availability within the city? tic and cultural proximity really helps. 7. Are Government incentivesTalent pool is one of the most Typically, near-shore emerging cit- being carefully evaluated?critical aspects of location selec- ies have strong linguistic similarities Different locations have differenttion. Depending on the services to and cultural compatibility with the incentives for IT-BPO company set-66 GS Destinations Compendium 2010 www.globalservicesmedia.com

expert Speakups these days. Even the govern- issues like cost of living, provisions, organizations to choose but they needments are taking active interest in etc. may have a direct impact on an to follow a planned and scientificmarketing their cities to IT-BPO employee’s life style. Additionally, rec- exercise of location selection.companies. Competitive monetary reation facilities are also quite impor- We wish you all the success in thisand non-monetary incentives such as tant to judge quality of life within exciting journey! GSquicker clearances, facilitation with the city.real estate and recruitment are some Jehil Thakkar is Executive Director, KPMGincentives on offer. For instance, in 9. Is site visit done before Advisory Services, India. Shailesh Narwaiye isGuadalajara (Mexico), the time taken finalizing the city? Manager, KPMG Advisory Services, Indiato set up business has gone down Site visit is one of the most importantconsiderably in recent years. Port aspects which should not be missed.Louis (Mauritius) provides easy work Even though all the important aspectspermits to encourage expatriates to of a city have been considered, com-work in the otherwise small coun- panies will gain the planned benefitstry. Other efforts include encour- based on the final site chosen withinaging technical education (such as that particular city. Therefore, oncein Santiago, Chile) or the study of the final two-three cities are decidedlanguages (such as English in the upon, a visit to the actual sites withChinese cities) to better prepare the these cities is critical before finalizingtalent pool. Hence, it is very impor- the offshore destination. One shouldtant for organizations to evaluate not underestimate the value of a sitethese benefits carefully before final- visit and conversations with otherizing the location to get maximum 27 January, New York experienced business groups conduct-benefits from the location. ing business in that location. For example, local business groups, pro-8. How is the quality of life in the fessional associations and chambers of “Other outsourcing conferences do not have a good mix of Buyers and Sellers.selected location? commerce. Most of the of life is lot of sellers. So I think, it’s a are avail-Typically, quality time it is an A wide range of choices good mix, you get to hear from the aspect of prospective which is very for companies. in manyuntouched buyers the city selection able today, important”process. Cost of living, crime rate, parts of the world with the similar Know More -Global Services Conference 2010 Attendeepollution and ease of commuting basic advantages offered by these cit-are few important parameters while ies (E.g. lower costs, qualified tal-analyzing a location for the quality of ent and aggressive incentives). Butlife it offers. Although pollution and depending on organizations’ strategyease of commuting may not have an and project requirement, each cityimmediate and direct impact on the becomes unique in its own way. Therequality of life a city offers, but other is no ‘one-size-fits-all’ strategy for 27 January, New York “Phenomenal & an Excellent platform to meet lot of clients and other people from same industry. Good exchange of thoughts and ideas. I would definitely come back year after year and would highly recommend people out there to come and participate” . -Global Services Conference 2010 Attendee Know More67 GS Destinations Compendium 2010 www.globalservicesmedia.com

expert Speak xperts by Stan Lepeak, Managing Director, EquaTerra Global Research Global Sourcing for FAO: Strong, Successful and GrowingDespite the pressure for increased service trade protectionism amongmany in Western governments and general anti-globalization saber rattling,the use of global sourcing and service delivery models remains strong.Global Sourcing Market increased service trade protectionism one-to-five scale where one representsOverview among many in Western governments “strongly disagree” and five meansThe use of global or offshore resourc- and general anti-globalization saber “strongly agree”. The only trend withes to support outsourcing efforts is rattling, the use of global sourcing consensus agreement, and it scorednothing new. The market has grown and service delivery models remains just above the mid-point, was thatand matured over the past 10 years strong. outsourcing buyers are growing morewith most medium and large end-user The quarterly Pulse surveys poll interested in offshore services deliv-organizations now engaging in some the top global business and IT service ered from locations other than India.form of global sourcing, and all top providers and EquaTerra senior advi- This trend is natural as the numberservice providers possessing diversified sors on what impact various market of quality and viable global sourcingglobal service delivery capabilities. conditions are having on buyers’ glo- locations expands and India-based There is ongoing debate in the bal sourcing preferences and patterns service providers themselves diver-market on both the overall merits of (see Figure 1 for 3Q10 results). sify delivery capabilities beyond theiroffshore or global sourcing and its The advisors and service provid- home market. Neither advisors norfuture growth. Some pundits predict ers described to what degree they service providers see buyers pulling(or hope) that global sourcing, like agreed or disagreed with five positions back from global sourcing in generalglobalization, has peaked and, due related to trending in global sourc- or their use of India-based service pro-to shifting buyer preferences, more ing. They ranked their responses on a viders as major trends.restrictive trade and tax policies, con-verging wage ranges, etc., the growthof global services sourcing will slow orperhaps begin to contract. However,the reality of the market for globalservices sourcing is much different.While models, preferences and poli-cies are always shifting, overall growthin global services delivery continuesunabated. EquaTerra recently released theresult of its 3Q10 global advisorand service provider pulse survey.While the results were mixed to posi-tive relative to the overall growth ofbusiness process and IT outsourcing,they were clear on continued strength Coopyright © Equa Terra 2010. All rights reservedof the offshore and global servic- Market Conditions: Impact on Global Sourcinges market. Despite the pressure for68 GS Destinations Compendium 2010 www.globalservicesmedia.com

expert Speak Results were similar in EquaTerra’s the Philippines and China are also2009 – 2010 european iTo popular offshore locations, with 19service provider performance and percent, 18 percent and 14 percent,satisfaction study. This market study respectively, again more heavily uti-analyzed over 1,600 IT outsourcing lized by buyers in North America.(ITO) contracts across Europe, and While only eight percent of respond-found that over 50 percent of all ITO Coopyright © Equa Terra 2010. ents cited South America, it is on a All rights reservedbuyers (with a high of more than 70 solid growth trajectory from a smallpercent in the U.k.) are currently Global Sourcing Models base. Location selection and prefer-utilizing near or offshore outsourcing. to Support FAO ences are a function of buyer prefer-Among these users of global sourcing ence, language needs and require-services, over one-half plan to increase the expansion of global service deliv- ments, and the footprint of leadingnear and offshore usage going forward ery footprints by multinational and FAO providers.and less than 10 percent plan to do regional FAO providers, and theless global sourcing. growth of offshore captive F&A oper- Future FAO Global Sourcing ations, some of which have been spun PlansGlobal FAO Provisioning off into successful FAO providers. As noted above, nearly three quartersWhile these findings reinforce that the of respondents in this market studyuse of global service delivery models is Top Global FAO Service plan to increase their overall usage ofwell established for IT its growth also Delivery Locations FAO. Buyers are also bullish on theircontinues in other non-voice busi- Not surprisingly, India is the domi- future use of global sourcing to sup-ness process areas. EquaTerra client nant offshore destination (see Figure port their FAO needs (see Figure 4).engagement experience and research 3). Seventy-eight percent of market Sixty-eight percent of the buyersconsistently find that the use of near study respondents are using India to using offshore resources for Recordand offshore resources to deliver fulfill at least some of their global to Report plan to expand efforts, asfinance and accounting (FAO) serv- sourcing needs, while 43 percent are do 60 percent of the buyers using off-ices is increasingly prevalent in today’s using processing centers in Central shore for Order to Cash. For Procuremarket as part of a coordinated and and Eastern Europe. The usage of to Pay, 51 percent of the respondentscomprehensive sourcing strategy. Central and Eastern Europe was expect to increase offshore efforts, butEquaTerra explored this trend in the much stronger for buyer organiza- it is important to note that much ofrecently completed, inaugural edition tions located in Western Europe than this work is already offshored. Whileof its Global FAO Service Provider in the North America, while India was the use of near and offshore servicePerformance and Satisfaction Study. a top destination for North American models is common across all FAO This FAO study investigated 110 buyers as well as those in the United process areas, it is most frequent-FAO contracts held by more than kingdom. ly utilized to support transactional90 of the top finance and accounting Central America, the Caribbean, activities. More strategic work like(F&A) spending organizations world-wide. The total annual contact value(ACV) of the contracts included inthis study exceeds $1 Billion. Eighty-six percent of the organiza-tions that participated in this researchstudy are currently utilizing nearand/or offshore resources (see Figure2). Forty-eight percent of these areemploying both, 34 percent are usingonly offshore, and four percent areusing just nearshore resources. Thisgrowth of global FAO provisioninghas been facilitated by the increase Coopyright © Equa Terra 2010. All rights reservedof service capabilities of India-basedservice providers with ITO roots, Top Global FAO Service Deliver Locations69 GS Destinations Compendium 2010 www.globalservicesmedia.com

expert Speak drivers. • For buyers using both offshore and nearshore FAO service deliv- Coopyright © Equa Terra 2010. All rights reserved ery models, 33 percent were sig nificantly positive and 53 percent were moderately positive that FAO has met its original drivers. • For buyers using just an onshore FAO service delivery model, 24 percent were significantly positive and 56 percent were moderately positive that FAO has met its original drivers. Future Global FAO Sourcing Plans While all models overall supported the achievement of FAO drivers,analytics is increasingly moving off- of respondents were significantly posi the relatively highest levels of suc-shore, albeit on a much smaller scale. tive and 46 percent moderately posi cess came via offshore and nearshoreThere are no signs that FAO buyers tive. Equally important, 20 percent of delivery models.are pulling back from their global respondents were very satisfied and 48 Finally, relative to general servicesourcing efforts, and protectionism, percent satisfied with the performance provider satisfaction, buyers that arequality concerns, language challenges of their FAO service providers, with using offshore and nearshore FAOand other issues cited by some market zero respondents very unsatisfied with provisioning registered higher scorespundits are having no material impact service provider performance. Further than buyers just using onshore serviceon global FAO demand. reinforcing these positive findings, delivery. Nineteen percent of buyers The ongoing, increased use of over 70 percent of respondents plan using offshore provisioning were verynear and offshore FAO resources is to increase their usage of FAO going satisfied with their service providersone important means to help buyers forward. and 38 percent were satisfied. Buyersachieve the cost reduction and other Several deal attributes, including using both nearshore and offshoregoals they seek from their FAO efforts. deal size, age, geographic scope and scored providers at 22 percent for veryGlobal FAO can increasingly deliver complexity, affect these satisfaction satisfied and 53 percent for satisfied.on drivers such as access to skills, levels. The strongest direct positive Buyers using just onshore deliveryfor example, to support more kPO correlation to service provider satis- scored providers at just eight percent-centric FAO efforts. Global service faction was with buyers’ self-assessed satisfied and 46 percent satisfied. Sodelivery across a broad spectrum of sourcing management capabilities, while overall all buyers were generallymarkets is increasingly the norm for highlighting the importance of good satisfied with their service provider’sFAO services, whether for global, outsourcing governance to outsourc- performance, those using offshoreregional or local buyer organizations. ing success. The use of offshore or delivery were the most satisfied. nearshore FAO service delivery mod- Global sourcing has become a coreGlobal FAO Sourcing = Global els also contributed positively to FAO means to deliver F&A services. WhileFAO Satisfaction? results. the nature and mix of buyers’ globalRegardless of the usage levels of global Buyers using both offshore and F&A service delivery models will con-sourcing to support FAO efforts, the nearshore FAO services were more tinue to evolve over time, globalmost important questions are how likely than buyers just using onshore sourcing will continue to play a criti-satisfied buyers are with their global resources to indicate that FAO has cal role. And as the bar on the benefitsFAO efforts and how satisfied they are achieved the original drivers sought buyers’ seek from FAO is continuallywith the performance of their FAO in its usage. raised, so too must their capabilitiesservice providers. The answers here are • For buyers using offshore FAO to design, execute and manage theiraffirmative on both counts. service delivery models, 41 per- global service delivery models. GS When asked to what degree FAO cent were significantly positive andhad delivered on the original drivers, 38 percent were moderately posi Stan Lepeak is Managing Director, Equa-buyers sought in its usage, 40 percent tive that FAO has met its original Terra Global Research70 GS Destinations Compendium 2010 www.globalservicesmedia.com

expert Speak xperts by Mario Tucci, Senior Global Business Consultant Why Latin America is Still a BUY If you combine lower risks, a better cultural fit and an appetite for investments, you will recognize a pattern for a BUY market in Latin AmericaI recall six years ago when Tata zones, as well as functional testing will provide precious feedback that Consultancy Services was and descriptions. In general, Latin will bring innovation to your proc- expanding from India to open American people live in environ- esses, balancing the costs with better Global Delivery Centers around ments that are very similar to those of and faster outcomes. Also, we havethe World. Latin America and China the US or Europe. Americans drink welcoming governments. Almost allbegan almost at the same time. The Corona. They fly Embraer«s jets. They Latin American countries are luringlatter was promising great opportuni- give Colombian flowers. They drink IT companies (regional and global) toties, large amount of people, fantastic Chilean wine. They travel to Uruguay. establish centers there. you will comecosts. Now fast forward to 2010. upon Free Trade Zone regimes,TCS has around 8500 people in investment promotion activities,Latin America, but only 1500 in Latin American people under- tax vacations, research benefitsChina. It has gained new cus- and probably a special perk iftomers within Latin America and stand US business, culture you ask for it. you will also findshows an accelerated growth rate and preferences.In IT projects improving abilities with regardsas this region is being “discov- to infrastructure (internet, air-ered” by large US and European that means less conflicts, ports, security, electricity).countries. So, how come you accurate functional aspects So, if you combine lowergrow faster in a region with so risks, a better cultural fit and anmany different countries, much and better testing appetite for investments, youless people and more distance will recognize a pattern for ato your main location? Investors BUy market. But move fast.know that the obvious is not always That means, Latin American peo- More and more people are discoveringthe best deal. ple understand US business, culture Latin America’s hidden treasures. GS Welcome to cheap Latin America. and preferences. And in IT projectsOr should I say Right Latin America. that means less conflicts, accurate Mario Tucci is a Senior Global Business Do you need to lower your risks? functional aspects and better testing. Consultant. He is also a principal partner atEven with higher wages than India Please also consider the ‘Follow The Hemistion a Globalization Consulting com-or China or some parts of Africa and Sun’ approach in which projects move pany. He leads several consulting and businessEastern Europe, incorporating Latin from Latin America to Europe to activities including support to GovernmentAmerica in your portfolio will signifi- Asia in a round-the-clock, non-stop Agencies, Free Trade Zone Parks, BPO start-cantly lower your risks. If you are a US environment. ups and IT Companies.or European company, just imagine But is Latin America ready andcalling your vendor or team during available? Firstly, let’s think people.regular hours. Imagine talking about yes, there are some issues (shortages,cultural issues that are much similar. attrition, language abilities, strongThink in flying over there in less than local currencies) in some countries.5 hours average. But in exchange, most Latin America And what if you need to speed IT people have a lot of workingthings up? Agile development is much experience as they are graduates fromeasier to execute from similar time universities. That means they can and71 GS Destinations Compendium 2010 www.globalservicesmedia.com

expert Speak xperts  by Dr. P.K.Mukherji, President & Managing Partner, Avasant Asia            Africa- The Next Outsourcing           Frontier                          Countries across Africa are trying to position themselves as competitive  destinations for IT/ BPO by promoting low-cost labor and nurturing          conditions for a build-up of world class IT infrastructure.                 F            ollowing in the footsteps of opportunities and to gain consider- elecommunication rates; training India and the Philippines, able marketshare. funds; and marketing aid. countries across Africa are A number of African nations       position themselves are regaining traction as emerging trying to Vast Talent Availability, as competitive destinations for IT/ IT/BPO destinations. While South Untapped The Next Billion  BPO by promoting lowcost labor and Africa leads Africa’s BPO sector; per- Second only to Asia, Africa provides nurturing conditions for a buildup of forming call center services and all access to a large pool of youthful  world class IT infrastructure. These types of backoffice operations, in workers. The continent, in its entirety,          nations are leveraging their advaan- the continent, other nations across has a favorable demograpphic wherein continent   demographics, popu- the are emerging as favo- tage of younger     majority of the population is in the less lation with good English and Frenchl           rable outsourcing destinations.  than 25 years age group. To illustrate,            anguage skills, a high degree of cul- Countries like kenya, Ghana, Egypt, South Africa and Egypt are the lead-   tural alignment to Western countries Mauritiuus, Tunisia and Morocco ing nations, each contributing a labor coupled with a similar timezone to are using outsourcing as a key tool force of over 20 million. Following           Europe and a shared business culture. to alleviate themselves from the cur- them are nations like Ghana, kenya          The countries are realigning their rent situations to achieve Economic         and Morocco, each with an available focus to address the paradigm shift in Proogress and prosperity. Most of  workforce at or around 11 million the outsourcing arena and are devel- the African nations are  using their workers. oping comprehensive strateggies to differentiated version of the “four  However, inspite of the availability rapidly position themselves as attrac- pronged approach” to attract BPO of a reasonably large labour pool, a  competitivet tive destinations for IT/BPO services companies: taxbreaks; very small percentage of the pool is         directly deployable in the industry.   Challenge for most of these countries People & is to provide traiining to the labour Rank Country Finan cial Business total Score  Skills pool to increase the level of skill for 1 India 3.13 2.48 1.3 6.91 deployment in the induustry. It is 2 China 2.59 2.33 1.37 6.29 thus imperative for them to bring a 6 Egypt 3.07 1.2 1.37 5.64 larger cross section of the population into the labor force 7 Philippines 3.19 1.17 1.24 5.6 and transition to a global services- 15 Ghana 3.26 0.7 1.36 5.32 centric model. In this evolution, 17 Tunisia 2.86 0.91 1.45 5.22 these countries are investing in skills 25 Mauritius 2.32 0.95 1.77 5.04 development and enhancement to 26 Senegal 3.06 0.88 1.08 5.03 enable their vast young population 30 Morocco 2.62 0.93 1.42 4.97 to take up jobs in the growing serv- 39 South Africa 2.28 1.02 1.44 4.74 ices sector. Source: AT Kearney Global Services Location Index 2009 72 GS Destinations Compendium 2010 www.globalservicesmedia.com

expert Speak total <14 51–64 Labor Force they become destinations of choice Population years years for providing best in class global serv- Morocco 34,343,220 31% 64% 11.39 million (2007 est.) ices and making them conducive to South Africa 48,782,756 29% 66% 20.49 million (2007 est.) do business. Mauritius 1,274,189 23% 70% 574,000 (2007 est.) A positive case for outsourcing is built not just with labor cost arbitrage Kenya 37,953,840 42% 55% 11.85 million (2005) but coupled with multiple key drivers Ghana 23,382,848 38% 59% 11.29 million (2007 est.) such as a nation’s ability to provide Egypt, Arab Rep. 81,713,520 32% 64% 22.1 million (2007 est.) and sustain a host of catalysts, such Tunisia 10,383,577 23% 70% 3.593 million (2007 est.) as a sustainable output of industrySource: CIA Factbook 2008, July 2008 estimates ready talent pool, availability of quality infrastructure, a risk free macro- econnomic environment, financiallyVast Continental Market As per International Monetary attractive incentives and businessOpportunnity Fund (IMF), the gross domestic prod- structures, employment laws, qualityAfrica also has the fastest growing uct (GDP) of the African region has of life etc. Investors in Africa today,telecommunications industry. The been growing 5 to 6 percent annually, are finding considerable benefits fromtotal number of mobile subscribers since 2001. In parallel, foreign direct leveraging the vast multilingual talentin Africa is expected to reach500 pool, competitive cost struc-6600 Million by 2013. Nigeria tures, proximity to Europeanalone, being the most populous As per IMF, GDP of the African and Middle East markets andcountry in Africa, has over 74 the growing domestic markets.million subscribers and is grow- region has been growing 5 to 6 Hence there is a need for aing at the rate of 23 percent each percent annually, since 2001. concentrated effort by regionalyear. governments to analyze inter- South Africa and Egypt lead In parallel, FDI into the region nal strengths and weaknesses tothe banking sector in Africa, with has shown significant growth build a specific niche. In paral-both these nations succcessful in lel, countries need to undertakeattracting foreign banks to oper- since the turn of the century macrolevel development acrossate in the local market. In 2008, sectors to enhance availableEgypt attracted FDI of $13B, out- skills, brand and position theirpassing South Africa’s $8.5B. kenya’s investment into the region has shown respective countries and put in place45 commercial banks posted a 14 significant growth since the turn of the necessary incentives to boost furtherpercent growth, while Nigeria grew at century. Governments of a number of investment in the region. GS15 percent in 2009. With a low rural countries with support from interna-penetration, kenya, has less than 10 tional organizations like the World Dr. P.K.Mukherji is President & Managingpercent of its population utilizing Bank and The Commonwealth Trade Partner, Avasant Asiabanking facilities. This offers a great Development have been proactivelyopportunity for growth in the African working towards attracting invest-banking system. These are expected to ment into the IT& BPO sectors.further propel the growth of the BPOindustry in the region because of the Conclusionneed for better customer service in the While the world still views Africa asgrowing industries. a region marred by conflicts, corruption and health issues, governments africa-Outsourcing Market Drivers in many countries are taking the lead on branding their countries, by • Multi-lingual Delivery Capability • Near Shore advantage for Europe and putting out right positive messages • proximity to Middle East Markets and countering the negative percep- • Access to local market economies which tions. Countries in the region are tak- • is growing at 5–6 percent ing the lead to make the infrastructure • Improving infrastructure and connectivity in the leading cities world class so that73 GS Destinations Compendium 2010 www.globalservicesmedia.com

expert Speak xperts by Don Jones, Partner, Technology & Life Sciences Practice, BDO USA Latin America Emerges as a Key Outsourcing Destination for 2011As countries in Latin America become more developed they are alsobecoming more attractive as potential IT outsourcing jurisdictionsH istorically, the top four multinationals, such as Politec Global China’s strong IT infrastructure, the criteria for selecting an IT Services (based in Brazil) and language barrier in China and the lack IT outsourcing location DBAccess (based in Venezuela). Even of adequate legal protection for intel- include cost (both initial Indian outsourcing giant Tata has lev- lectual property continue to hinderand ongoing), education and skill eraged its presence in fourteen coun- China when companies are selectinglevel of the local workforce, scalability tries in Latin America with offshore a jurisdiction to place outsourced IT(i.e., the ability of an IT outsourc- centers in Brazil, Uruguay, Mexico operations. These issues are not asing provider to handle growth), and and Chile to serve emerging organ- relevant in Latin America as the localpolitical stability. The values placed izations with local and global IT workforce is generally proficient inon these criteria may vary based on resources. both Spanish and English and a betterthe need of the company seeking to China and India continue to be atmosphere for protecting intellectualoutsource its IT. As countries in Latin the major players in the IT outsourc- property.America become more developed they ing market; however, Latin America Other important factors thatalso become more attractive as poten- is poised to take market share from may sway U.S. companies to choosetial IT outsourcing jurisdictions based both of these respective countries. Latin America over China or Indiaon these four criteria. include time zone similarities 2010 saw Latin America offi- and geographic proximity. Timecially emerge as a new destina- Indian outsourcing giant Tata zone similarities may not affecttion for IT outsourcing. Based 24/7 customer support (as theseon recent surveys Latin America has leveraged its presence in lines will be staffed at all times),is number three overall in jobs fourteen countries in Latin but for general research andoutsourced from the U.S. The development outsourcing hav-strategy implemented by U.S. America with offshore centers ing employees that work in thecompanies that outsource ITfunctions to Latin America is in Brazil, Uruguay, Mexico and same time zone is a definite benefit both for the main teamoften referred to as “near-shor- Chile to serve emerging organ- and outsourced team. Similar toing.” This near-shoring trend is China and India, with the pri-expected to continue as South izations with local and global mary exception of Mexico andand Central American econo- IT resources a few other countries, the politi-mies have been growing stead- cal climate in Latin America isily over the last decade and are stable for the most part. Finally,poised to become business and although a minor factor, thereIT outsourcing forces in 2011. We In 2010, while China was able to are fewer cultural differences betweenhave seen local companies in these gain market share from India in the the U.S. and Latin America versusemerging markets quickly become global IT outsourcing business due to the U.S. and China or India. These74 GS Destinations Compendium 2010 www.globalservicesmedia.com

expert Speakfactors have paved the way for Latin China is not encountering these issues When it comes to outsourcingAmerican IT outsourcing service pro- as costs remain low for IT outsourc- strategy however, company’s set ofviders to shine. ing purposes and the Chinese yuan unique needs should be considered In response to China and Latin has not appreciated against the U.S. before selecting a country to placeAmerica’s outsourcing growth, India dollar (as it is generally fixed to the outsourced IT operations. In order tohas sought to establish a stronger U.S. dollar). Thus, from a cost per- maximize the cost benefit of IT out-infrastructure to facilitate IT con- spective China remains attractive but sourcing, companies may want totracts in Bangalore as well as other is still subject to the previously dis- consider seeking the help of qualifiedparts of the country in order to quell cussed limitations with respect to lan- experts when selecting an IT out-concerns that India may not have the guage and IP protection. These cost sourcing jurisdiction. These expertstechnology or the ability to meet the considerations and other factors may can assist the company in navigatinggrowing demands of large U.S. com- push more companies towards Latin regulatory and local customs of whichpanies. For some companies operat- America over China and India when the company may otherwise by una-ing on a smaller scale, the issue of IT companies are looking to relocate ware. The cost of good advice is argu-infrastructure may not be a top prior- their IT infrastructures. ably much less than the cost of relo-ity when choosing an IT outsourc- In 2011, we can expect this trend cating IT operations to a more favora-ing service provider. These companies to continue as new firms located ble jurisdiction. Once a company hasmay be uninterested in a stronger throughout Latin America bring determined its IT outsourcing needs,Indian IT infrastructure and may innovative, new IT and business-fo- it is crucial to address the possibilitieschoose Latin America over India for cused solutions to companies looking that lie ahead. GSother reasons. Regardless, with proper to outsource IT functions. Moreover,planning, high speed data centers they are expected to do this all with Don Jones is a Partner in the Technology &and other IT functions can be moved a cheaper price tag than other tra- Life Sciences Practice of BDO USA, LLP, arapidly to anyplace in the world with ditional outsourcing powers such as national accounting firm providing assur-little impact on the bottom line. China or India. ance, tax, financial advisory and consulting India continues to be a major With the increasing cost of doing services.player in the IT outsourcing market business in the U.S. from a both adue to the education and skill of its regulatory and an overall tax perspec-workforce as well as its politically sta- tive, more and more U.S .companiesble government; however, the overall will continue to turn to IT outsourc-cost of outsourcing to India has been ing as a means to lower overall ITslowly rising as the country becomes costs and increase global profitability.more developed and the U.S. dol- We can expect to see U.S. companieslar continues to weaken against the look to Latin America in the nearIndian Rupee (since 2009 the Rupee future to satiate this demand for lowhas appreciated by approximately cost and effective IT outsourcing9 percent against the U.S. dollar). solutions. 27 January, New York “Other outsourcing conferences do not have a good mix of Buyers and Sellers. Most of the time it is lot of sellers. So I think, it’s a good mix, you get to hear from the buyers prospective which is very important” . -Global Services Conference 2010 Attendee Know More75 GS Destinations Compendium 2010 www.globalservicesmedia.com

expert Speak xperts by Pumela Salela, BPO/ITeS expert Consultant, World Bank Africa as an Outsourcing DestinationAfrica has the essential ingredients to be a force to be reckoned within the global BPO space, and addressing the challenges it faces willenhance its value offerinI n the past Africa, with its 53 coun- by 2040 about 1.1 Billion Africans strategy are: Talent Development, tries, was known as a continent of will be of working age. This is signifi- Infrastructure, Business Environment, starvation, disease, war, conflict, cant, in an era where the working age Incentives and Marketing. In the dis- famine and hunger inhabited by population amongst other countries cussion that follows, we will illustratethose which Franz Fanon called “The is shrinking. Furthermore, 128 mil- how Africa fares in each of the pillarsWretched of the Earth”. Today, Africa lion African households are predicted identified.presents a different face to the rest to be having discretionary income byof the world. A face characterized 2020. Finally, 50 percent of Africans Talentby economic growth, regulatory and will be living in cities by 2030. What As indicated above, Africa is homepolitical reform. To date, Africa is esti- does this mean for the Globalization to 1 Billion people, the majority ofmated to have one Billion inhabitants, of Servic es in the form of Business which are of working age. Africa has athe majority of which are of working Process Outsourcing & Off shoring? highly educated workforce, both with-age population group. A recent study in the continent and in the Diaspora.by Mckinsey Global Institute (MGI) Hope in BPO African Countries are investing inindicates that today, Africa’s collec- Part of Africa’s growth can be attribut- training and skills development initia-tive GDP is $1.6 Billion, roughly ed to the growth of the Services Sector tives, to ensure that a readily availableequal to Brazil’s or Russia’s. Tomorrow within Africa. The Services sector pool of labor is at hand to feed into(year 2020) Africa’s collective GDP contributes to more than 60 percent the global services model. Egypt, foris estimated to reach $2.6 Trillion. of the GDP in those African coun- example, has a system of convertingReal GDP rose 4.9 percent per year tries wherein it is developed. In these graduates from other fields of study,from 2000 through 2008, more than countries, Services sector accounts for be BPO sector ready and providestwice its pace in the 1980’s and ‘90s. the majority of employment creation. subsidies for the training and conver-Telecom, banking, and retail are Business Process Outsourcing and Off sion thereof. Nile University, which isflourishing. Construction is booming. shoring, presents a new hope for housed within Egypt’s Smart VillageForeign investment is surging. South Africa, whereby the continent will no (A BPO Park) also, trains studentsAfrica recently hosted the first FIFA longer be seen as a continent for aid, in the areas of ICT Enabled Services.Soccer World Cup to be hosted on the but rather a continent ready for trade Talent development is seen to be relat-African soil and delivered a spectacular in services. If we look at the necessary ed to job creation, whereby Africanworld class event. Africa surprised all ingredients of a country strategy for countries have specific targets to thein the area of mobile phone subscrip- building the BPO&O sector, we will number of jobs they wish to createtions, as its subscribers have increased realize that Africa is making significant in the sector, within stipulated timesteadily since year 2000 to reach 316 strides in developing its BPO sector. A frames.million to date. Interesting to note summary Gartner’s Top 10 Criteria,that African countries are seen to be AT kearney Global Services Location Infrastructureequally competing with other emerg- Index, Mckinsey Location Readiness Across Africa, changes in broadbanding markets and are as productive Index and Hewitt’s International connectivity are underway. A numberas other countries such as India and Benchmarking Model reveals that the of undersea cables are scheduled toChina. The MGI study estimates that top five building blocks of a country be completed by 2011 (see before76 GS Destinations Compendium 2010 www.globalservicesmedia.com

expert Speakand after diagrams). On the West countries involved in the outsourcing of hardware and software is charged atside of Africa, in addition to the sector are doing everything possible 2.5 percent. On the other hand Egyptexisting SAT3 cable, there shall be to lessen the burden of starting up offers a corporate tax of 20 percentthe WACS (Q2 2011), MaIN OnE a business, thus improving the ease and customs duty of 6.2 percent.(Q4 2010), ACE (2011), GLO-1(Q4 of doing business in the respective Countries which do not offer tax2009). On the East side of Africa, countries. breaks, for example South Africa andin addition to the SAFE cable, the kenya, offer capex, opex and talentEASSy (Q2 2010), Seacom (2009) Incentives development tailor made incentivesand TEAMs (Q3 2009) cables have Countries in Africa have woken up torecently been launched. This signals a the need for incentives as “sweeteners” Marketingpositive change from a continent that to outsourcing deals. These vary from Increasingly African countries are seenwas only served by the SAT3 cable on capex, opex, talent through to tax as key exhibitors and participants inthe West and the SAFE cable on the breaks. Morocco for example offers a the global BPO conferences, summitsEast. This will improve not only the tax exemption of 5 years and imports and seminars. Each country involvedquality of telecommunications in thecontinent but also the costs thereof,as some of these providers promiseto slash telecommunications pricesby up to 80 percent of the currentmarket price. African governments are engagingthe private sector to develop othercritical infrastructure such as ener-gy including electricity, water sup-ply, roads, rail, air connectivity, hotelamongst others. Real Estate is becom-ing a big draw card as governments,together with private sector, are build-ing readily available “plug play” facili-ties for BPO Operators. Examples of Africa Telecommunications beforethese can be found in kenya, SouthAfrica, Mauritius, Egypt, Morocco,and Tunisia.Business environmentOn a macro-level, the 2009 AfricaCompetitiveness Report came outamid the most significant financialcrisis in generations. In this context,the state of Africa’s financial marketsfigures was among the main topicsanalyzed in the Report. The analysisfinds that some African countries—namely South Africa, Algeria, Nigeria,and Egypt—are well poised to bounceback from the crisis. This is becausethese large economies enjoy competi-tive banking systems and have func-tional regulatory systems, the con-sequence of financial-sector reformsadopted since the early 1990s. On Africa Telecommunications after i.e. by 2011.a micro-level, the rest of the African77 GS Destinations Compendium 2010 www.globalservicesmedia.com

expert Speakin the BPO space is creating aware- top BPO investors in the form of makers, potential private sector inves-ness about its value proposition, dem- Genpact, Aegis, Teleperformance, tors, and development partners.onstrating its readiness to take on amongst others. Recently (October The note addresses the followingoutsourcing of off shoring work from 2010) a new value proposition was questions: what can Nigeria do to takeglobal clients. Ghana is amongst those launched which positions the coun- advantage of the benefits of globalcountries. Through, the leadership try as a gateway and delivery center trade in services; how can the countryof Avasant, a global sourcing advi- for the rest of sub-Saharan Africa, brand itself as an off shoring destina-sory firm, Ghana is making strides in a near shore destination to Europe- tion for international investors; andshowcasing itself as a viable outsourc- particularly the United kingdom and what government policies are requireding country, within Africa. a Dutch language outsourcing hub to ensure that Nigeria plays a role in due to its history and Dutch language the growing ICT off shoring sector.BPO Country Developments capabilities. According to the Global In the same paper, Nigeria’s mainSub-Saharan Africa Competitiveness Index, South Africa’s strengths as a potential off shoringGhana education is ranked higher than that destination are identified to lie in itsAn industry association called of India and China. A research con- relatively low-wage and cost structure.GASSCOM was formed. An arti- ducted by Everest in 2009 indicated The country’s large size and youthfulcle by Lewis (2010) indicates the that South Africa has three times population are also seen as assets forSecretariat of Ghana’s Information (3x) the number of qualified actuarial companies wishing to establish large-Technology Enabled Services (ITES) scientists than India. South Africa has scale call centers and similar opera-wants to establish e-governance and mature service offerings in Banking, tions. Along the same vein, Nigeria’selectronic voting in his country. The Financial Services, Insurance, Retail, good record on contract enforcementSecretariat has even disclosed that Telecommunications, IT Outsourcing, and flexible labor market regulationsBPO would be contributing millions knowledge Process Outsourcing and are viewed as having a potential toof dollars to the country’s economy. Legal Process Outsourcing. South increase its competitiveness, as doHe anticipated that it would help Africa prides itself of having an English recent steps to streamline businessGhana to become fastest developing language whose accent is neutral and registration.nation in the world. It is mentioned augers well with the countries culturalthat English is the official language and product affinity with Europe and Mauritiusin Ghana which means that “the the United States. Mauritius prides itself for ease ofpeople of Ghana won’t be facing doing business as the country statesany problem dealing with US or Uk Malawi that a new business can be set upbased service buyers”. The country Malawi is new in the game but is set within 3 days. The country indicatessees itself as having the right kind to make its mark. In September 2010 that it has 15,000 available bilingualof resources for attracting all sorts of the country held a workshop facilitat- talents (English and French) fromFrench BPO jobs including French ed by the Commonwealth Secretariat, knowledge Worker to Cadre level.call centers. In addition to that the with the aim of developing a roadmap It cites a low fiscal regime as one ofcountry sees huge potential in the for the country to grab a slice of the its strengths (15 percent harmonizedareas of graphic design, business BPO Global space. In its initial offer- personal and corporate tax, 0 percentenquiry and legal processes outsourcing, the country will focus in the tax on dividends, free repatriation ofing among others. lower end of the value chain, focusing profits). In terms of Service offerings, on English and its Customer service Mauritius is strong in the follow-South Africa capabilities. ing CRM (Telemarketing, helpdesk),South Africa was one of the first Application Development ( Softwaremovers into the BPO space within Nigeria Design and Development, WebsiteAfrica. As early as 2006, the country The World Bank has recently development, IT Consulting),IThad identified BPO as a priority sec- (November 2010) published a paper Services ( Data Centers includingtor for development. As a result, all titled: Developing an African Off hosting, IT Help Desk, Disasterthe necessary strategic pillars were shoring IndustryThe case for Nigeria. Recovery ), BPO / kPO (Financeput in place to position the country The purpose of the policy note is to & Accounting, HR Outsourcing,globally as a contender in the BPO raise awareness of Nigeria’s potential Publishing and content developmespace. To date, the country has man- as an African off shoring hub, and nt,Procurement,Architectural &aged to attract some of the world’s it is aimed primarily toward policy Engineering Design, Legal). The78 GS Destinations Compendium 2010 www.globalservicesmedia.com

expert Speak Top 10 Things that Make Africa an Attractive BPO Destination � Low attrition African countries report low rates of attrition. Explanations given have centerd on the notion that when an African gets a job, they hold on to it. This is usually attributed to the fact that one working African person may be responsible for ten others, who may be members of a household and/or dependants. Some countries report attrition rates that are as low as 14 percent. � Multilingual workforce As indicated above both North and sub-Saharan Africa offer multiple languages which could support the United States, Middle East and the European markets. These range from Spanish, French, Dutch, German, English, Italian and Arabic � Near shore location for Europe The maximum time difference between the African countries and Europe is four hours. The time zones similar to Europe offer a near shoring opportunity to Europe, for the region. � Improved telecommunications infrastructure African Nations are formulating policies that encourage the development of ICT infrastructure and BPO services. By 2011 the telecommunications infrastructure in the continent will have improved three-fold. � Cost competitiveness In some parts of Africa, setting up BPO Operations in Africa can cost 10–20 percent less than India. Other countries are willing to match the prices that potential BPO investors get in India, the Philippines or any other countries competing with Africa. � Strong Government Support Governments at the national, provincial and local levels are supporting BPO initiatives through adding their own broadband initiatives to those offered by the continent, supporting marketing initiatives, approving incentive policies, providing infrastructure at reduced rates. Another trend is for the governments to have a BPO ambassador at a high level in government, to represent the respective countries during international marketing awareness engagements. In essence, governments have put pillars in place that provide a solid foundation for the BPO sector in Africa. � Emerging local market opportunities International BPO operators and other Multinational Corporations who set up shop in Africa can benefit from penetrating the domestic market in the said countries, arising from an untapped rising consumer market which demands goods and services that can be provide by the companies with the global experience. In some cases, international companies have come up with innovative ways to service the local market as evidenced by Safaricom who cut the boundaries between banking, financial services and telecommunications through a mobile phone. � Offshore destination for the United States Africa lies in between the United States and India and thus provides an evening shift for US offshorers versus India’s night shift. This further enhances the low attrition value proposition for Africa. � Availability of Labour Africa has a high population of a young work force, which is talented and educated. This provides a readily available labor pool for investors to draw from. � Continued GDP growth Despite the Economic Recession, African markets have grown at a rate of 5–6 percent in some cases outperforming most global economies.79 GS Destinations Compendium 2010 www.globalservicesmedia.com

expert Speakcountry is positioning itself as theregional hub of Disaster Recovery andBusiness Continuity planning infra-structure and services for the globalservice provider community.KenyaThe country has a world class cap-tive in the form of Safaricom and awell known BPO third party serviceprovider, kenCall. kenya is drivinginnovation. Safaricom launched theworld’s first mobile phone servicethat allows money transfers by phone:MPESA. According to the kenya ICTBoard website(www.ict.go.ke) kenya’sBPO strengths lie in Call Centers (inbound customer services & support, A new world class BPO Park in South Africa called Coega.It offersoutbound sales +marketing, market readily available infrastructure and ‘plug&play’ facilities.research, event management, printmedia); Back office processing (onlinedatabase management, email & forms power, telecoms and internet. According penetration and telecommunicationsprocessing, data entry & conver- to Datamonitor, Egypt’s Outsourcing networks, foundations which aresion, corporate communications and sector is expected to grow rapidly due to solid for the BPO sector. Moroccographic design); Software develop- increased offshore interest from Western has been included in the Gartnerment (website development and ani- Europe as well as the United States and list of the Top 30 Outsourcing des-mation).kenya purports that the cost Canada. BPO country studies by A.T. tinations. The country’s strategy wasof operating a 1000 seat BPO center kearney (2009) place Egypt in the 06th developed by Mckinsey throughin kenya is lower than in competing position globally, out of the 50 coun- the so called Mckinsey 2006 -2012destinations such as India and the tries surveyed. Itida reports that “Egypt Impact Plan. Morocco has a numberPhilippines largely because an average is proving to be an attractive location of BPO Parks for example, MoroccoFTE cost is $300 in kenya as opposed for world leaders in the ICT industry, Techno park, Casashore, Rabat, andto $425 per month in India). One of surpassing its competitors in the devel- ForeShore. Two additional technokenya’s key competitive strengths is oping world – India and the Philippines parks are going to be created in thethat it has a well developed financial – and attracting the attention of major near future. There are strong incen-services sector, and is developing into corporations in the developed world, tives for start ups. The governmenta regional (East Africa) hub. As one of notably Orange, Vodafone and SQS. ensures that it receives a Returnthe indicators of this strength, ATM These corporations are investing heavily on Investment (ROI) on projects.numbers in kenya have grown by in Egypt as a coveted ICT outsourcing Companies normally pay 40 per-41 percent per annum. location.” Egypt has a number of initia- cent salary taxes. If they are BPO tives to support the BPO sector, from operators, they pay 20 percent. ThisNorth Africa smme incubation, through eduEgypt means that it gets cut into half.Egypt (training initiative) to international Morocco has Spanish language capa-itida is the agency responsible for Egypt’s marketing support for established BPO bilities which allowed it to attract aBPO sector. Over the past few years, operators in the country. Egypt has vari- bpo service provider Atento and DellEgypt has been striving to enhance its ous language capabilities which include established helpdesks in Morocco toICT infrastructure through national French, German, Arabic, English and serve its French and Spanish custom-initiatives and projects implemented Spanish. ers, creating about 1,500 jobs. Thejointly by the public and private sector. country currently has about 200 callEgypt has extensive availability of high Morocco centers, including 30 of significantquality and low cost/subsidized sup- Morocco is seen as the African coun- size, that employ a total of overport infrastructure and services such as try that is leading in broadband 18,000 people.80 GS Destinations Compendium 2010 www.globalservicesmedia.com

expert SpeakTunisia Challenges that there is outward migrationA website (www.bpovoice.com ) indi- � In sub-Saharan Africa the first to the European Countries andcates that in Tunisia, ICT & out- challenge worth highlighting is that the labor pool is tighteningsourcing of services are the beneficiar- Perception! Perception! Perception! sharply. The outsource backlashies of a significant level of investment, A number of countries in the is seen to be a hindrance togetheramounting to some 3.5 Billion Euros developed world still see Africa with the concern over lost domes-for the period 2007-2011, compared as backward and underdeveloped. tic jobs in Western Countries.to just 230 million Euros for the peri- My belief has always been that � Corruption. Western Businessod 1992-1996. Tunisia, as a country, “Seeing is Believing”. I would practice is something that isis strategically positioned as a gateway encourage each Executive that relatively new in North Africa,to Africa, Europe and the Middle East. is exploring location options to according to Data Monitor.Its population has French, Arabic and book a flight to Africa and touchEnglish speaking capabilities. the ground. The reality is defi- Across Africa (North Africa and sub- Many European companies have set nitely different from what Africa Saharan Africa), the similarity of valueup BPO operations in Tunisia to capi- has been perceived. Many parts propositions has made it difficult totalize in order for Tunisia to serve their of Africa are on par with west- differentiate one location from anoth-French speaking customers. Tunisian ern standards from a professional er. The volatility of the currency is alsoengineers are said to be 80 percent business point of view, to world cited as one of the challenges that makelower than Europe cost wise. Alcatel’s class infrastructure. investors feel uneasy, however, inter-R&D center in Tunisia was first tasked � Education Linkages could be cited viewing current BPO investors revealswith assisting the company’s Paris and as another challenge, in the sense that they are able to mitigate the risksMilan centers in the development of that some school leavers and uni- and make the necessary profits.products. It evolved later into an inde- versity graduates have the qualifi-pendent design and implementation cations yet at times, these qualifi- Conclusioncenter. SR Teleperformance, a multi- cations are not directly suitable to The key reasons behind Africa’s growthnational call center, currently employs meet the needs of the outsourcing surge as highlighted in the MGI reportabout 1,000 workers in Tunisia that sector. A process of training and are improved political and macroeco-serve French clients. skills development is sometimes nomic stability and macro economic With 200 call centers, Tunisia is required before the school leavers reforms. African governments increas-one of the leading call centers and and graduates can be absorbed ingly adopted policies to energize mar-outsourcing destinations in Africa and into the workforce. kets. They privatized state-ownedin the Arab world. There are proce- � Lack of tax breaks is seen as a hin- enterprises, reduced trade barriers, cutdures adopted by the government to drance by potential investors. The corporate taxes and strengthened regu-strengthen investment in call centers Tier 1 BPO destinations such as latory and legal systems. As a result, sixand remote support centers, through India offer tax breaks. Potential of the African countries mentionedthe activation of the network structure investors usually assume that all above ( Egypt, Ghana, Tunisia,of the Internet Protocol (MPLS) at the other countries follow suit. yet, Mauritius, Morocco, and South Africa)national level in addition to the exten- there are African countries that are are in the AT kearney 2009 top 50sion of the El Ghazala (a pool of more vehemently opposed to tax breaks, Global Services Location Index. Thisthan 3900 people: 2000 engineers, who would not mind giving other signals that Africa has the essential140 teachers & researchers and 1700 incentives which could take the ingredients to be a force to be reckonedstudents) which specializes in ICT place of tax breaks and have the with in the global BPO space. Theactivities and research. Tunisia seeks same effect on the bottom line. challenges identified are somethingto attract 2,000 new outsourcing jobs that the various African stakeholdersby the end of 2010. It is envisaged The inhibitors, in North Africa, are engaging robustly on, ensuring thatthat Tunisia could become a regional according to Data Monitor are the they are addressed in order to enhancebusiness hub for companies operating following: the Africa value offering. GSin the space and aeronautic sector as � Perceived regional instability. Therethere are already 20 foreign companies are misconceptions revolving Pumela Salela is a BPO/ITeS expert and athat are currently operating in the around certain locations in North Consultant for the World Banksector, including major names such as Africa and Eastern Europe.Latecoere, Zodiac and Sogema. � Labour Availability. There is belief81 GS Destinations Compendium 2010 www.globalservicesmedia.com

expert Speak xperts by Pradeep Udhas, Executive Director, IT/ITeS Sector, KPMG Offshoring in the Latin American RegionSome key factors that make Latin America attractive todayE merging economies across the a Chiliean IT major is a key exam- only the U.S. but also for markets in world are trying to emulate ple of consolidation in the domestic Europe. The number of non-indigenous the success India has achieved market. The company has acquired European languages spoken in Brazil, in providing outsourcing serv- Telsinc - a Brazilian IT services pro- Mexico, Argentina and Chile is veryices. What started with the millen- vider, NextiraOne – a Mexican IT high.These include Spanish, Portuguese,nium bug, led to India being one company; and Bogota-based software English, French, and even some Germanof the top outsourcing destinations developer Red Colombia. It plans to (in Argentina). It is also noteoworth thatin the world. Availability of talented further invest USD 500 million in many Japanese and Chinese migrated toresources, a large pool of people speak- acquisition till year 2012. Peru in the late nineteenth century asing English, government support in rural labourers, and now form an inte-the form of tax breaks and relatively Local Talent Pool grated part of Peruvian society.strong IP/Data security related laws A Heidrick & Struggles report indi-are some of the factors that worked in cates that of the ten LAM countries WagesIndia’s favor. Countries in the Latin analyzed, for the report, Brazil, Chile Latin American countries such as Brazil,American (LAM) region namely Brazil, and Costa Rica would be the leaders Mexico, Chile and Argentina, haveArgentina, Chile, Mexico, etc are being in terms of availability of local talent competitive wages and a good educa-increasingly recognized as alternate des- pool in 2013. Similarly, a TMC.net tional system. A kPMG-NASSCOMtinations to India and China primarily report indicates that Colombia’s call study titled “Emerging Destinations fordue to the increasing demand for near center and outsourcing industry is Indian IT / ITES Industry” (2007)shore outsourcing service providers. one of the fastest growing industries revealed that the minimum wage in the The blend of LAM’s geographi- in the country - a testament to the region was pretty low and rose fromcal proximity to the US and existing availability of local talent. A majority USD 2.8 per hour in 2005 to USD 3.2cultural similarities between the two of the countries in the region have a per hour in 2006, with Brazil being thehas increased the importance of the good education system in place with highest at USD 5.6 per hour. However,region. In recent times, leading BPOs/ the top few countries having a literacy the IT wages were significantly higheroutsourcing companies like Capgemni, rate of over 90 percent. Currently, at USD 8.7 per hour, with Chile andTCS, Aegis BPO etc have expanded in Mexico, Chile and Brazil have the Mexico paying more than two times thethe region not only with an aim to hedge best talent pool in the region. Chile is rates paid in India. As wages keep risingtheir operations but also to exploit the widely regarded as the most attractive in India, they could soon be at par withlocal market. Some of the key factors environment for talent while Brazil those in the LAM region, thus makingthat make the Latin American region has the best universities in the region. it a much more level playing field.attractive are as follows: In conclusion, Mexico, Costa Rica, Language Skills Brazil and Chile are the main countriesDomestic Market Spanish and Portugese are the two main to watch for offshoring related activitiesThe LAM region is a significantly large languages spoken in the region which in the LAM. These countries have largemarket with 20 countries, 550 million abodes well for companies that aim number of investments coming in, apeople, 4.4 Trillion dollars of GDP, to target non English speaking clien- good availability in terms of local talentand 8000 dollars per capita income. tele. For e.g.: the US has a fairly large and enjoy the increasingly importantBrazil alone is expected to account for Hispanic community, which can be tar- near shore advantage. GSan estimated USD 128 Billion worth of geted through this near shore alternative.IT end-user spending in 2013, accord- The multilingual workforce in Argentina Pradeep Udhas is Executive Director withing to IT research firm Gartner. Sonda, can also be effectively tapped for not KPMG, heading IT/ITeS sector.82 GS Destinations Compendium 2010 www.globalservicesmedia.com

expert Speak xperts by Sumeet Chugani, Associate Attorney, Diaz Reus & Targ India’s Global Expansion: Eyeing Latin AmericaI ndia-based corporations and Agreement in May, 2007. undeniably benefit from this upsurge entrepreneurs are carrying their Indian companies continue to set of Indo-Latin American trade and economic goals and didactic tal- up operations in Latin America in investment. As Latin America and ents abroad, with an emphasis everything from technology, pharma- India strive to reach their respectivein entering other emerging markets. ceutical manufacturing, energy and potential, businesses within eachLatin America, which has displayed mining. India’s top software service region will discover golden opportu-a steady spirit during the recent eco- exporter, Tata Consultancy Services nities. GSnomic crisis and a strong potential Ltd., which currently employs overfor long term growth, has ascended 7,500 Indian professionals in Uruguay, Sumeet Chugani is Associate Attorney atto the top of India’s radar. Thousands Argentina, Chile, Ecuador and Diaz Reus & Targ, LLP, a full-service inter-of Indian-born companies seeking to Mexico, expects its Latin American national law firm focusing on trade, finan-expand their global footprint, while sales to double to upwards of $1B cial, commercial and corporate transactions,obtaining needed commodities to sus- within the next three years. Jindal tax, immigration, litigation, and arbitrationtain India’s one Billion plus popula- Steel & Power Ltd. has already spent matters.tion, recognize the value of Latin more than $3 B to develop more iron-America. ore mining within South America, India’s total investment into Latin with strong interest stemming towardsAmerica and the Caribbean reached the agricultural front. As well, Techupwards of $10B in 2009, while Mahindra’s Chief Executive Sanjayimports from the region hinged kalra has repeatedly stated his firm’saround $9.2B. Although this figure strong interest in merging or acquir-is minimal compared to Sino-Latin ing Latin American companies.American trade, it illustrates that a This is just the beginning. Indiabridge has been built between these eyes Latin America as the next frontiertwo emerging regions. for growth and expansion. For exam- The Indian government is encour- ple, just this month Ashok Leyland,aging movement into Latin America a leading Indian commercial vehi-through the signing of multiple cles manufacturer, declared its desireregional Trade Agreements. India is to gain new opportunities in Latincurrently a member of Mercosur, a America. Moreover, Tata Consultancytrading block including Argentina, Services Ltd. continued to expand inBrazil, Paraguay, and Uruguay. As the region by opening new offices inwell, India has entered into a PTA Lima, Peru to increase its IT, BPOwith Chile to further trade between and consulting services in Central andthe nations. The Indian Government, South America.with a continuing view to promote India’s entrance into Latin Americaeconomic cooperation between the will obviously present challenges.regions, has set up Joint Commissions Different languages, local taxation,with other important trading partners complex laws, and political dynamicsin Latin America. For example, India will pose risks to uninformed Indiansand Mexico signed a ten year Bilateral entering the region. Those playersInvestment Promotion and Protection which balance risk and reward will83 GS Destinations Compendium 2010 www.globalservicesmedia.com

expert Speak xpertsThe 2010 Legatum Inside cover cover v1 25/10/10 10:24 1 Inside v1 25/10/10 10:24 Page Page 1Prosperity Index™The Scope of the 2010 Legatum Prosperity Index™ The 20102010 Legatum Prosperity Index™ Rankings The Legatum Prosperity Index™ RankingsT he Prosperity Index™ assesses Top 110 Countries in the 2010 110 countries, accounting Legatum Prosperity Index™(Middle Low ranking countries (Bottom 30) Strong ranking countries (Top 30) (Top 30) Strong ranking countries Average ranking countries (Middle 50) Average ranking countries Rankings Low ranking countries (Bottom 30) 50) for over 90 percent of the world’s population, and is Personal Freedom Personal Freedom Entrepreneurship Entrepreneurship Safety & Security Safety & Security & Opportunity & Opportunitybased on 89 different variables, each Social Capital Social Capital Overall Rank Overall Rank Governance Governance Education Educationof which has a demonstrated effect Economy Economy Country Country Health Healthon economic growth or on personalwellbeing. 1 1 Norway Norway 1 6 1 12 6 4 12 4 4 2 4 2 2 1 2 1 2 2 Denmark Denmark 4 1 4 2 1 5 2 17 5 6 17 66 26 The Index consists of eight sub-3 3 Finland Finland 9 4 9 7 4 3 7 10 3 3 10 12 3 7 12 2 7indexes, each of which represents a4 4 Australia Australia 8 13 8 8 13 2 8 15 2 13 15 4 13 4 4 4 5 5 New Zealand New Zealand 17 14 17 4 14 1 4 19 1 7 19 3 7 3 3 3fundamental aspect of prosperity: 6 6 Sweden Sweden 7 2 7 6 2 10 6 9 10 8 9 58 11 5 111. Economy 7 8 8 7 Canada Canada Switzerland Switzerland 5 2 10 5 11 2 5 10 1 11 12 5 29 1 11 12 3 29 16 11 12 3 1 16 1912 8 1 6 19 8 62. Entrepreneurship & Opportunity 9 9 Netherlands Netherlands 3 12 3 10 12 13 10 13 13 18 13 1318 5 13 5 10 10 United States United States 14 3 14 3 3 9 3 1 9 25 1 9 25 12 9 12 (E&O) 11 11 Ireland Ireland 22 7 22 14 7 15 14 14 15 4 14 7 4 10 7 103. Governance 12 13 12 Iceland 13 Iceland United Kingdom United Kingdom 38 18 9 38 5 18 17 9 9 5 6 17 22 9 2 6 2022 1 2 2320 8 1 1523 14 8 9 15 14 94. Education 14 14 Austria Austria 12 16 12 13 16 17 13 8 17 15 8 2315 1523 15 15 15 Germany Germany 13 15 13 15 15 25 15 6 25 20 6 1420 16145. Health 16 16 Belgium Belgium 16 21 16 16 21 18 16 12 18 19 12 1019 1910 16 196. Safety & Security 17 17 Singapore Singapore 6 8 6 11 8 30 11 2430 5 24 36 5 5436 54 18 18 Japan Japan 11 19 11 20 19 2420 5 24 11 5 4211 3142 317. Personal Freedom 19 19 France France 19 2019 19 20 14 19 7 14 27 7 1727 4217 428. Social Capital 20 21 20 Hong Kong Hong Kong 21 Slovenia Slovenia 10 34 17 10 2634 18 17 2726 5318 16 27 3453 16 16 14 34 9 16 1614 22 9 2416 3822 24 38Each of the sub-indexes provides two22 22 Taiwan Taiwan 25 2225 37 22 7 37 26 7 1026 2810 5228 52 23 23 Spain Spain 33 2733 22 27 11 22 25 11 3825 1838 3518 35important analyses: first, an economic24 24 Czech Republic Czech Republic 26 2926 3029 2730 21 27 2821 3028 3230 32assessment, and second, an assessment2625 25 Italy 26 Portugal Italy Portugal 29 40 3029 2840 3230 2428 19 32 2024 18 19 2720 3018 17 27 2730 2417 3027 6324 30 63of a country’s subjective wellbeing, or27 27 South KoreaSouth Korea 15 18 15 31 18 8 31 30 8 3330 6433 5964 59 28 28 Uruguay Uruguay 46 5246 2952 3729 4037 2240 1122 34 11 34happiness. 29 29 Poland Poland 37 3837 35 38 2635 3226 21 32 3221 2532 25 30 30 United Arab United Arab Emirates Emirates 30 2430 3824 3438 3534 2435 5424 3654 36 31 31 Kuwait Kuwait 20 3120 36 31 5536 3655 2936 3429 2834 28Key Findings from the 2010 32 32 Chile Chile 39 3339 21 33 52 21 4652 3746 2637 6426 64Legatum Prosperity Index 33 34 33 Costa Rica Costa Rica 34 Hungary Hungary 36 48 4436 4248 2644 33 42 5826 31 33 4158 2831 4841 2628 2048 5026 4520 5550 45 55� entrepreneurship and opportunity 35 36 35 Estonia 36 Israel Estonia Israel 59 27 2359 2527 23 23 2825 3623 2828 3936 2328 3639 9023 6836 8990 4368 1789 43 17 correlate more closely to a nation’s 37 37 Slovakia Slovakia 47 3647 39 36 3239 2932 3229 6332 4063 40 overall prosperity than any other 38 39 38 Croatia 39 Greece Croatia Greece 53 41 3753 35 41 4837 46 35 4448 2146 3344 2221 34 33 31 22 3834 8631 4138 10086 41 100 factor. While other foundations 40 40 Panama Panama 50 4150 52 41 5052 6350 41 63 3941 3739 37 41 41 Argentina Argentina 42 4642 8646 3986 31 39 42 31 3742 4737 47 such as health and education, are 42 42 Lithuania Lithuania 76 3976 45 39 3545 3835 3538 7035 4970 49 critical, levels of entrepreneurship 43 44 43 Malaysia 44 Malaysia Trinidad and Trinidad and Tobago Tobago 21 58 3421 4058 34 34 5440 4534 6754 4445 6167 5244 4961 9052 2949 9090 7229 90 72 and access to new opportunities 45 45 Brazil Brazil 32 4932 6049 7560 5575 7655 2576 5625 56 46 actually provide the best proxy to 46 47 Bulgaria 47 Latvia Bulgaria Latvia 75 81 5575 3281 57 55 47 32 4857 3347 4548 4233 4045 4542 4040 6745 8040 9267 80 92 understanding how prosperous a 48 48 Tunisia Tunisia 49 4549 5045 4150 5041 4450 9144 6991 69 49 49 Saudi Arabia Saudi Arabia 28 4828 4948 6549 4965 71 49 103 71 18103 18 society can be. 50 50 Kazakhstan Kazakhstan 51 72 51 8772 4687 5646 4756 5347 3353 33� it pays to be a democracy. Twenty- 51 52 51 Romania 52 Thailand Romania Thailand 67 23 5067 5423 6550 53 54 4365 4753 5343 6447 4353 7564 4943 10675 9449 20 106 94 20 three out of the top 25 societies in 53 53 Mexico Mexico 31 5931 6659 6966 5469 7954 7279 3972 39 54 54 Belarus Belarus 74 6774 104 67 23104 3723 6037 7660 2376 23 55 Jamaica 55 Jamaica 79 4779 6747 7667 6876 5368 4553 5145 5184 GS Destinations Compendium 2010 56 57 Belize 56 Belize Botswana Botswana 57 61 73 51 61 6473 www.globalservicesmedia.com 77 51 2564 8077 8525 5880 9685 5758 5996 4757 2159 5047 6021 50 60 58 China 58 China 24 6024 6460 5964 6659 9266 10292 27102 27 59 Sri Lanka 59 Sri Lanka 84 7684 4376 5643 7256 10172 52101 2952 29

34 34 Hungary Hungary 48 4248 33 42 31 33 2831 2628 5026 5550 55 35 35 Estonia Estonia 59 2359 23 23 3623 3936 3639 6836 4368 43 36 36 Israel Israel 27 2527 2825 2828 2328 9023 8990 1789 17 37 37 Slovakia Slovakia 47 3647 39 36 3239 2932 3229 6332 4063 40 38 38 Croatia Croatia 53 3753 48 37 4448 3344 34 33 3834 4138 41The 20102010 Legatum Prosperity Index™ Rankings The Legatum Prosperity Index™ Rankings 39 40 39 Greece 40 Panama Greece Panama 41 50 35 41 4150 46 35 52 41 2146 5052 2221 6350 31 22 41 63 8631 3941 100 86 3739 100 37 expert Speak 41 41 Argentina Argentina 42 4642 8646 3986 31 39 42 31 3742 4737 47 42 42 Lithuania Lithuania 76 3976 45 39 3545 3835 3538 7035 4970 49 43 43 Malaysia Malaysia 21 3421 34 34 4534 4445 5244 9052 90 90 90 Strong 44 ranking countries (Top 30) (Top 30) Strong ranking countries 44 Trinidad and Trinidad and Tobago Tobago Average ranking 58 ranking 58 Averagecountries (Middle 40(Middle Low 6167 Low 61 40 countries 5450) 675450) ranking countries (Bottom 29 49 ranking countries (Bottom 30) 2949 7230) 72 45 45 Brazil Brazil 32 4932 6049 7560 5575 7655 2576 5625 56 46 46 Bulgaria Bulgaria 75 5575 57 55 4857 4548 4045 4040 80 40 80 47 47 Latvia Latvia 81 3281 47 32 3347 4233 4542 6745 9267 92 emotions. “Soft issues”, such Personal Freedom Personal Freedom Entrepreneurship Entrepreneurship Safety & Security Safety & Security 48 48 Tunisia Tunisia 49 4549 5045 4150 5041 4450 9144 6991 69 as people’s perceptions of each & Opportunity & Opportunity Social Capital Social Capital 49 49 Saudi Arabia Saudi Arabia 28 4828 4948 6549 4965 71 49 103 71 18103 18 Overall Rank Overall Rank Governance Governance 50 50 Kazakhstan Kazakhstan 51 72 51 87 72 4687 5646 4756 5347 3353 33 other’s trustworthiness, have a Education Education Economy Economy Country Country 51 51 Romania Romania 67 5067 6550 4365 5343 4353 4943 9449 94 strong positive correlation with Health Health 52 52 Thailand Thailand 23 5423 53 54 4753 6447 7564 106 75 20106 20 53 541 53 Mexico 54 Belarus 1 Norway Mexico Belarus Norway 31 74 1 5931 6774 6 1 6659 1046 12 67 6966 23 12 4104 5469 3723 4 4 7954 6037 2 4 7279 7660 2 2 3972 2376 1 2 39 23 1 economic performance and simi- 552 55 Jamaica Denmark Jamaica 2 Denmark 79 4 4779 1 4 6747 2 1 7667 5 2 6876 17 5 5368 6 17 4553 66 5145 26 51 2 larly “hard issues” such as higher 563 56 Belize 3 Finland Belize Finland 61 9 51 61 4 9 77 51 7 4 8077 3 7 1080 58 3 3 58 5710 4757 12 3 5047 7 12 50 574 57 Botswana Botswana 4 Australia Australia 73 8 6473 13 8 2564 8 13 8525 2 8 9685 15 2 5996 13 15 2159 4 13 6021 44 7 60 4 levels of GDP per capita, have 585 New58 ChinaZealand 5 ChinaZealand New 24 17 6024 14 17 6460 4 14 5964 1 4 6659 19 1 9266 7 19 3 92 1027 3102 27 3 2952 27 3 a strong impact on people’s life 596 59 Sri6 Lanka Sweden Sri Lanka Sweden 84 7 7684 2 7 4376 6 2 10 43 56 6 9 56 7210 10172 8 9 5101 52 8 11 5 29 11 607 60 Mongolia Mongolia 7 Canada Canada 88 5 5888 10 5 8158 5 10 4981 12 5 8549 11 12 16 85 39 11 8716 1 39 87 26 1 8 26 8 satisfaction. 6277 2962 3 81 46 74 6646 6866 61 62 8 9 61 Vietnam Switzerland Vietnam 8 62 Morocco Switzerland Netherlands Morocco 9 Netherlands 62 2 35 3 7762 11 2 6835 12 3 1 11 1068 63 12 81 1 13 63 9310 7429 7093 13 13 12 3 6970 18 13 1912 1369 100 18 6 19 5100 1313 68 6 13 5 � Choice and opportunity matter 63 10 63 Russia States 10 United Russia States United 64 14 5664 3 14 3 56 101 3 9 101 38 3 4738 1 9 8247 25 1 9 82 8825 5388 12 9 53 12 more to happiness than making 64 11 64 Philippines Philippines 11 Ireland Ireland 52 22 6952 7 22 14 69 55 7 15 55 6014 1460 8115 4 81 8514 5685 7 4 8256 10 7 82 10 65 12 65 Colombia Colombia 12 Iceland Iceland 55 38 5755 9 38 5957 17 9 6859 6 17 6268 2 6 1 62 1072 8107 57 1 6257 14 8 62 14 a lot of money quickly. Being free 66 13 67 14 66 South Africa South Africa 13 United Kingdom 67 Paraguay 14 Austria United Kingdom Paraguay Austria 77 18 54 12 4377 5 18 7454 16 12 4043 9 5 91 74 13 16 2240 78 9 8613 17 91 8878 2022 7586 8 17 9788 2320 55 75 15 8 5197 1523 5955 2315 9 51 7115 6123 15 59 71 9 61 15 to choose the course of your life 68 15 68 Dominican Republic Germany Dominican Republic 15 Germany 80 13 6280 15 13 15 62 75 15 7775 25 15 6 77 8025 8080 20 6 1480 3320 1633 6614 66 16 and experiencing the satisfaction 69 16 69 Ukraine 16 Belgium Ukraine Belgium 96 16 7396 21 16 9873 16 21 4098 18 16 4840 12 18 5848 19 12 1058 7119 7371 1910 73 70 17 70 Indonesia Indonesia 17 Singapore Singapore 43 6 8243 8 6 7082 11 8 3070 7011 8470 2430 5 84 5624 9656 36 5 5496 4436 19 44 54 that comes from pursuing new 71 18 72 19 71 Namibia 18 Japan 72 Namibia Japan Macedonia Macedonia 19 France France 68 11 98 19 7868 19 11 2098 61 19 2078 4419 71 61 19 20 8744 2420 71 71 14 19 5 87 9324 7 71 4314 6793 11 5 5043 27 7 4267 35 11 8150 1727 3135 7042 8681 4217 70 31 86 opportunities matter more than 42 73 20 73 Peru Kong Peru Kong 20 Hong Hong 57 10 6657 17 10 6966 18 17 6269 5318 34 62 8253 82 7234 14 6272 1614 9862 2416 98 24 quickly making a lot of money. 7093 2770 4242 51 42 9 51 2265 74 21 75 22 74 Jordan 21 Slovenia 75 Jordan Slovenia Venezuela Venezuela 22 Taiwan Taiwan 93 34 56 25 2634 6556 2225 4226 9665 37 22 16 27 5496 7 37 16 16 2654 78 7 6516 9578 1026 1059 2895 8010 83105 3822 5280 4628 83 38 46 52 � Two europes are emerging. In the 76 23 76 Uzbekistan Uzbekistan 23 Spain Spain 108 33 108 8533 27 2285 8427 11 84 6422 2564 59 11 61 59 3825 6161 1838 2261 3518 22 35 overall rankings, the Baltic coun- 77 24 77 Ecuador 24 Ecuador Czech Republic Czech Republic 60 26 2960 7526 9775 3029 7397 2730 73 73 21 27 28 73 8821 6088 3028 9660 3230 96 32 78 25 El 78 Salvador El Salvador 25 Italy Italy 89 29 3089 8129 61 81 3230 19 61 8432 18 84 6519 7065 3018 2770 5830 3058 104 27 104 30 tries are rapidly falling behind 79 26 80 27 79 Algeria 26 Portugal 80 Algeria Portugal TurkeyKoreaTurkeyKorea 27 South South 45 40 69 15 7945 2840 5369 18 15 2479 9028 31 53 51 18 2090 7224 8 51 8231 6772 2720 3082 57 8 17 67 9327 33 57 8330 2493 101 6483 9533 17 74101 6324 108 95 5964 74 63 108 59 the rest of the EU. Additionally, 81 28 81 Guatemala Guatemala 28 Uruguay Uruguay 65 46 5265 71 46 8871 2952 3788 8829 4088 7737 22 77 8440 1184 8322 4883 34 11 48 34 none of the four original so-called 82 29 82 Bolivia 29 Poland Bolivia Poland 63 37 8763 3837 3587 9338 6193 2635 32 61 8626 91 86 21 32 5591 3221 7855 2532 78 25 83 30 83 Syria Arab Syria Arab Emirates 30 United United Emirates 71 30 2471 9230 3892 7924 7479 3438 5274 3534 24 52 8635 9986 5424 3699 7554 75 36 PIGS (Portugal, Italy, Greece, and 84 31 85 32 84 Lebanon 31 Kuwait 85 Lebanon Kuwait Honduras Honduras 32 Chile Chile 70 20 97 39 8370 3120 8097 3339 3683 92 31 8380 21 33 5192 5536 5283 7921 79 51 3655 7679 4652 29 79 8936 37 76 6246 3489 8229 79 263762 2882 9934 8179 6426 99 28 81 64 Spain) score higher in prosper- 86 33 86 Moldova Costa Rica Moldova 33 Costa Rica 104 36 104 6336 44 2663 8944 6689 5826 7166 4158 74 71 4841 9774 2048 7697 4520 76 45 ity than the remaining Western 87 87 Nicaragua Nicaragua 102 102 9448 8594 8385 2883 8331 6883 4168 8741 87 34 88 35 34 Hungary 88 India 35 Estonia Hungary India Estonia 48 44 59 42 9344 2359 33 42 23 93 41 23 31 33 8941 3623 9589 3936 2628 7895 3639 5026 7478 6836 5550 105 74 4368 55 105 43 European nations. 89 36 89 Egypt 36 Israel Egypt Israel 72 27 8472 2527 2884 7825 6378 2828 6963 2328 7769 9023 109 899077 109 9589 17 95 17 � improved governance is emerging 90 37 90 Ghana 37 Slovakia Ghana Slovakia 109 47 36109 8947 3989 5636 9556 3239 8995 2932 51 89 3229 31 51 6332 101 31 4063 101 40 91 38 91 Nepal 38 Croatia Nepal Croatia 100 53 100 9653 37 4896 9437 9294 4448 8792 3344 8787 34 33 4487 3834 4144 8438 84 41 as a key driver of prosperity in sub- 92 39 93 40 92 Iran 39 Greece 93 Mali 40 Panama Iran Greece Mali Panama 78 41 85 50 8678 35 41 4185 108 50 4686 105 76 35 108 52 41 21105 5746 109 5052 76 22 57 6021 103109 6350 31 60 9922 54103 41 63 8699 108 4854 3941 31 106 100108 86 3748 5739 106 100 57 37 saharan Africa. The index shows 94 41 94 Senegal Argentina Senegal 41 Argentina 101 42 101 9942 46 8699 7346 104 398673 31104 9739 42 97 63 31 3763 4342 6743 4737 67 47 that the most successful African 95 42 95 Cambodia Cambodia 42 Lithuania Lithuania 92 76 3992 100 76 72100 45 39 35 72 9045 3890 9835 35 98 6638 7066 9835 9798 4970 97 49 96 43 96 Bangladesh Bangladesh 43 Malaysia Malaysia 66 21 9566 3421 3495 9534 9195 4534 9091 4445 9490 5244 4694 9052 9046 109 90 109 90 countries owe their success to radi- 97 44 98 45 97 Tanzania and Tanzania and Tobago 44 Trinidad 98 Rwanda 45 Brazil Trinidad Tobago Rwanda Brazil 95 58 94 32 4095 104 58 9794 4932 74104 5440 6097 5849 9974 6754 9658 7560 101 105 99 6167 96 5575 49101 9861 76105 6455 7898 2949 8464 2576 7278 5829 5684 107 25 58 72 107 56 cal improvements in the quality 99 46 99 Uganda 46 Bulgaria Uganda Bulgaria 91 75 5591 9875 8098 57 55 4880 100 57 102100 4548 106102 4045 75 106 4040 8075 6540 65 80 of their governance, particularly 100 47 100 Sudan 47 Sudan 83 3283 91 81 109 91 33109 107 42107 9233 108 92 92108 2192 21 92 101 48 Latvia 101 Zambia 48 Tunisia Latvia Zambia Tunisia 81 103 49 102103 4549 47 32 68102 5045 47 41 68 9450 5094 106 41 4542 81106 4450 6745 9181 7344 9267 9173 6991 91 69 in establishing confidence in the Copyright © 2010 Legatum Limited Copyright © 2010 Legatum Limited 102 49 102 Cameroon Cameroon 49 Saudi Arabia Saudi Arabia 87 28 4887 107 28 107107 4948 97 107 6549 100 97 4965 71100 100 49 100 6571 103 1865 102103 102 18 military and in the judicial system. 103 50 103 MozambiqueMozambique 50 Kazakhstan Kazakhstan 82 51 7282 10151 87101 8272 105 82 4687 109105 5646 47109 7356 5373 8547 9385 3353 93 33 104 51 104 Kenya 51 Romania Kenya Romania 107 67 50107 9067 6590 100 50 98100 4365 99 98 5343 109 99 4353 77 109 4943 7777 9449 77 94 � it’s hard to be prosperous as a 94 96 105 52 106 53 105 Yemen 52 Thailand 106 Nigeria 53 Mexico Yemen Thailand Nigeria Mexico 99 23 90 31 106 99 5423 5990 10331 103 108 106 53 54 103 6659 102 106 103 4753 108 6966 64 104 102 9447 106 5469 9664 75 79104 104 54 107 106 9479 72 75 104 79 20107 106 8994 3972 79 20 89 39 large country. Of the 10 countries 107 54 107 Ethiopia 54 Belarus Ethiopia Belarus 106 74 109106 6774 104109 9967 2399 108104 108108 3723 103108 6037 93 103 7660 2393 8576 85 23 in the world with more than 125 108 55 108 Jamaica African Republic Central 55 Jamaica African Republic Central 105 79 105105 4779 106105 6747 110106 7667 110 11076 68 53110 102 68 102 6953 45 5169 103 45 103 51 109 56 109 Pakistan Belize 56 Pakistan Belize 86 61 8886 51 61 7788 102 51 103102 8077 91103 5880 10591 5758 110 105 4757 110110 5047 110 50 million people, only the United 110 57 58 110 Zimbabwe Zimbabwe Botswana Botswana 57 China 58 China 110 73 24 64110 11073 6024 110110 2564 101 110 8525 6460 107101 9685 59107 11096 5964 104 110 2159 88104 6021 6659 88 60 9266 10292 27102 27 States ranks among the top 10 59 Source: The 2010 Legatum Prosperity 84 4376 Sri Lanka 59 Sri Lanka 84 76 Index™ 5643 7256 10172 52101 2952 29 countries in the Prosperity Index. 60 Mongolia Mongolia 60 88 5888 8158 4981 8549 3985 8739 2687 26 61 Vietnam 61 Vietnam 62 7762 6277 8162 74 81 46 74 6646 6866 � 68 economic growth is not enough 62 the Prosperity Index are electoral Morocco 62 Morocco 35 6835 direct implications on10069 6368 national 9363 7093 4738 6970 13 100 13 for the BRiCs. Despite being 63 Russia 63 Russia 64 5664 10156 8882 38101 8247 5388 53 64 democracies, and the other two Philippines Philippines 64 52 6952 prosperity. 5569 56856055 8160 85 81 8256 82 regarded as leaders among 65 66 (Singapore and Hong kong) are Colombia Colombia 65 South Africa South Africa 66 55 77 � prosperity is about balance. All of 5755 4377 5957 4043 57 6859 107 51977840 6268 8878 107 62 9788 6257 71 51 62 71 emerging economies, in order 67 semi-democratic societies. Paraguay 67 Paraguay 54 7454 the top ranking countries in the 91 74 59558691 7586 55 75 6159 61 to develop into prosperous 68 Dominican Republic 68 Dominican Republic 80 6280 7562 33807775 8077 8080 6633 66 69 � Changes in the “social fabric” of Ukraine 69 Ukraine 96 7396 Index perform well across58 eight 9873 71 all 4098 4840 5848 7371 73 nations, the BRICs will have to 70 71 a country can lead to big changes Indonesia Indonesia 70 Namibia 71 Namibia 43 68 8243 7868 sub-indexes. 7082 4478 9656 3567 7070 8744 8470 9387 5684 6793 4496 7035 44 70 foster improvements in areas 72 in national prosperity. Shifts in Macedonia Macedonia 72 98 � Material wealth cannot be 6198 71 61 815071 71 43 71 5043 8681 86 beyond economic factors. GS 73 Peru 73 Peru 57 6657 6966 62726269 8262 7282 9862 98 74 tolerance, satisfaction with free- Jordan 74 Jordan 93 7093 explained only by economic fac- 4270 105 4242 65 51 42 65 51 83105 83 75 76 dom of choice and other social Venezuela Venezuela 75 Uzbekistan Uzbekistan 76 56 108 6556 85108 tors, and happiness cannot be 9665 8485 8095 6161 5496 6484 7854 5964 9578 61 59 4680 2261 Source: The 2010 Legatum Prosperity Index 46 22 77 attitudes and practices clearly have Ecuador 77 Ecuador 60 7560 explained only by subjective 9775 6088 7397 73 73 8873 9660 Brochure 96 78 El 78 Salvador El Salvador 89 8189 61 81 8461 6584 7065 5870 104 58 104 79 Algeria 79 Algeria 45 7945 9079 7290 6772 93 67 101 93 74101 74 80 85 80GS Turkey Turkey Destinations Compendium 2010 69 5369 51 53 8251 5782 83 57 9583 108 95 108 www.globalservicesmedia.com 81 Guatemala Guatemala 81 65 7165 8871 8888 7788 8477 8384 4883 48 82 Bolivia 82 Bolivia 63 8763 9387 6193 8661 91 86 5591 7855 78 83 Syria 83 Syria 71 9271 7992 7479 5274 8652 9986 7599 75

Destinations Compendium 2011One Stop Resource On Global Outsourcing Destinations RELEASING NOVEMBER 2011 Inviting countries, cities, associations to take part in this initiative For more details, write to satishg@cybermedia.co.in

� Beijing 88 � Ho Chi Minh 109 � St. Petersburg 133 � Belfast 90 � Johannesburg 111 � Toronto 134 � Brno 91 � kolkata 113 � Warsaw 136 � Budapest 92 � krakow 115 � Ahmedabad, Bangkok, � Buenos Aires 96 � kuala Lumpur 117 Bhubaneswar, Brasília 137 � Cairo 98 � Mexico City 119 � Bucharest, Cape Town, Dubai, Glasgow City 138 � Chandigarh 98 � Prague 120 � Guadalajara, Istanbul, � Coimbatore 100 � Rio de Janeiro 122 Jakarta, kyiv 139 � Colombo 101 � San José 124 � Montevideo, Moscow, � Curitiba 103 � Sao Paolo 126 Mysore, Nizhniy � Dalian 104 � Santiago 128 Novgorod 140 � Guangzhou 106 � Shenzhen 130 � Penang, Perth, Seoul, � Hanoi 107 � Singapore 132 Taipei 141* This section contains information about cities which have been extensively sourced from various published sources,government sites, and other Internet resources and their factual accuracy needs to be independently ascertained.

Beijing Financial Streetcity Profile � beijing (Source: Wikipedia) Beijing ChinaThe Birthplace of China’s IT IndustryB eijing, a metropolis in northern China, is the Quick Facts capital of the People’s Republic of China. This City Beijing city has the advantage of a government that Region East Asia is enthusiastic about modern technology and Country Chinasupports software industry. City Population 22,000,000 Beijing is very much advanced and modernized, in City Average Monthly Entry Level $7,000terms of infrastructure, as most of China has a rich and Salary (in US$) per month (BPO)authentic (power and telecommunications) base. The City Average Monthly Entry Level $7,350growth of Changping Software Park, Zhongguancun Salary (in US$) per month (ITO)Software Park (zPark), and Beijing Industry University City Real-Estate Cost US$21.66 per square meter perSoftware Park reflects this support. zPark, lodging some month130 companies, is one of the prominent national software Major Service Providers in the Microsoft, IBM, Sun, BEA,industry bases in China. City Oracle, Infosys, Wipro, Satyam, As regard to tax incentives, Beijing has some local facili- Bearingpoint, Accenture,ties to encourage the software industry in the city (distin- Capgemini, HP, TCS, Unisys, and CapGeminiguished from those offered on a national basis): Primary Language Spoken Mandarin Chinese• Tax refunds on one-time investments, for the purchase of cars or accommodations, when hiring senior soft- Other Languages Spoken English, Japanese, Korean ware management or senior technical personnel. GDP US$173.7B• Exemption from individual income tax on govern- Time Zone China Standard Time (UTC+8) ment-funded awards given to senior software talent. Currency Yuan Beijing has around 1 million software support staff. The Exchange rate $1= 6.65 CNYemployee supply is plentiful and is expected to increase Unemployment 4.1 percentfurther as the Chinese government is upgrading its IT edu-cation. This destination has 18 universities with engineer- higher than the rest of China. Approximately, 70 percenting courses and ten with specific courses on programming. of the employees in the outsourcing industry have gradu-Importantly, it’s also home to Peking University (also ate degrees. Most of the university students choose theirknown as Beijing University) and Tsinghua University (the second language as English.Harvard and MIT of China, respectively). Both universi- Beijing has vantage over other cities in the areas of scaleties have engineering departments that produce outstand- and technical expertise of the workforce, infrastructure,ing university graduates. In short, Beijing is literally the risk profile, and lower attrition; but its labor cost com-birthplace of current and future software engineers. pared to other Chinese cities like Shanghai or Guangdong With a total number of 165,000 graduates, Beijing and Indian cities is 10-15 percent higher.boasts of being headquarters of around 200 IT compa- Contributing 30 percent of the total Chinese out-nies focused on global outsourcing. There are around sourcing revenue, Beijing attracts revenue of $580M in26,600 employees working in ITOs, 34,200 in BPOs, IT and BPO sector from Japan (49.8 percent), Unitedand 15,200 in kPOs excluding domestic outsourcing States and Europe (45.5 percent), India, Hong kong,resources. Its been seen that quality education in Beijing is and others (4.7 percent). In regard to the financial88 GS Destinations Compendium 2010 www.globalservicesmedia.com

city Profile � beijingindustry, Beijing is looked up as one of the most devel- encourage the outsourcing industry. According to the gov-oped cities in China. ernment policy, a company can benefit 0 percent income Also, this city is host to the country’s IT indus- tax for the first two years and 50 percent income tax for thetry, which was born in Beijing’s designated industri- following three years after authorization. The authorizedal park, Zhongguancun, near company can deduct employee’sPeking University and Tsinghua salary and training cost by 100University. known as China’s Contributing 30 percent of the percent from the revenue beforeSilicon Valley, this park con- total Chinese outsourcing rev- income tax.tinues to be a major center for enue, Beijing attracts revenue According to the Tax Law ofelectronics and computer-related China, the maximum deduct-industries and pharmaceuticals- of $580M in IT and BPO sector ible salary is $144.291 per per-related research. from Japan, United States and son and maximum deductible Some of the notable com- Europe, India, Hong Kong,etc. training cost is 1.5 percent ofpanies based in Zhongguancun the employee’s salary. The com-Software Park are Microsoft, Sun pany is allowed to deduct itsMicrosystems, BEA, IBM, Oracle, Accenture, Lenovo, R&D cost by 150 percent from its taxable income of thisP&G Process Design Center, BeyondSoft, Neosoft, year. For the self-developed software products, the VATComFrame, TCS, Infosys, Wipro, and Reuters. rate was 17 percent before 2010. However, the authorized Regardless of a drop in the country’s overall foreign company will get 14 percent VAT refunded immediatelydirect investment amid the global slowdown, Beijing rose when the VAT is paid. The imported equipments for the7.7 percent year-on-year in January, 2009, according to the company’s own use is tariff free.Beijing Municipal Bureau of Commerce. The capital city’s The State Council of the Chinese government hasforeign direct investment arrived at $700M in January, created 19 software parks under its ‘Torch Program’.Theup from the $650M during the same period of last year. 2,100 companies within these parks account for over 80A total of 90 overseas invested enterprises were approved percent of China’s total software sales.in January. Beijing not only has excellent connectivity to major The city also confronted with the collision of recession. global destinations, but also has one of the best telecomMost of the export-oriented outsourcing units have seen connectivity/bandwidth.reasonably big slowdown in new client deals this year. This is why the city is a major hub of China’s IT indus- Beijing government has framed certain policies to try and is considered a Tier 1 city for outsourcing. GS SNAPSHOT➤ A company can avail the benefit of 0 percent income tax for the first two years and 50 percent income tax for the following three years after authorization. The authorized company can deduct employee’s salary and training cost by 100 percent from the revenue before income tax.➤ According to the Tax Law of China, the maximum deductible salary is $144.291 per person and maximum deductible training cost is 1.5 percent of the employee’s salary.➤ Beijing rose 7.7 percent year-on-year in January, 2009, according to the Beijing Municipal Bureau of Commerce. This city’s foreign direct investment arrived at $700 M in January, up from the $650 M during the same period of last year.➤ This city is host to the country’s IT industry, which was born in Beijing’s designated industrial park, Zhongguancun.89 GS Destinations Compendium 2010 www.globalservicesmedia.com

Belfast Northern IrelandThe FDI Magnet of UKT raditional sourcing locations, which have been Quick Facts at the forefront of the outsourcing boom, City Belfast will sooner or later reach a saturation point. Region Western Europe Companies are now looking at different loca- Country United Kingdomtions to consider for their outsourcing activities, and City Population 268,323Belfast is a well-placed outsourcing destination amongst City Real-Estate Cost US$19.0884other places. Major Service Providers in Microsoft, Citigroup, Bombardier Belfast, capital city of the Northern Ireland, is the most the City Aerospace, Fujitsu, HCL BPO,successful region in the Uk at attracting Foreign Direct L&T Infotech, MindEye Inc., TCS,Investment. The city attracts largest number of software Supervalu, SAP Research Center.development projects in Uk. Belfast is home to strong Primary Language Spoken Englishsoftware, financial services, and telecom sectors. Other Languages Spoken Spanish, French, Italian, or German Students achieving first-class or upper second-class hon- Literacy Rate 98 percentors degree, have increased by 29pecent over the last decade GDP US$12.1306782Bfrom 4,012 to 5,165. The literacy is 99 percent in Belfast. Time Zone GMT/BSTThis indicates that there is enough talent pool in Belfast. Currency British pound (sterling)Also, labor costs are 15 percent lower than the Uk average, Exchange rate $1=£0.627625while labor turnover is less than 8 percent. The unemploy- Unemployment 6.5 percentment rate for Belfast currently stands at 6.4 percent (theNorthern Ireland rate is 6.6 percent). This compares withthe Uk average of 7.9 percent (December 2009). medium-sized enterprises (SMEs). The GDP growth rate is 6 percent and the inflation is In addition to government support, ready access to a4.8 percent. Gross Value Added (GVA) per capita provides a highly skilled and loyal workforce and the existence of angood comparative measure of productivity. It is compulsory already thriving local industry has encouraged major com-for the Uk businesses to register for VAT (value added tax), panies such as Nortel Networks and BT to choose Belfast asif sales of taxable goods and services provided in the previ- a location for their software operations. Belfast’s ICT sectorous 12-month period exceed £67,000 ($106,857.36). The has grown rapidly over the past years. The principal areasnumber of VAT-registered businesses was 8,730 in 2009. of focus have been in the fields of software development, New businesses can benefit from a variety of tax allowances mobile communications, Internet, and e-commerce.and reliefs that cut tax bills. These include capital allowances The rapid growth of this sector owes much to a numberfor investment in equipment and premises and tax relief and of indigenous companies who have successfully tappedcredits for spending on research and development. Corporation into international markets as well as the academic researchand personal taxation are among the lowest in Europe. and support that encourages further innovation and devel- Capital allowances of up to 100 percent in the first year opment in the sector.for small-to-medium sized enterprises (SMEs) are available, In 2009 over £500M ($797,327,654.98) worth offor expenditure on environmentally friendly plant and developments were unveiled, including a number of land-equipment. Also, tax credits for research and development mark buildings that opened their doors to the public againare available to stimulate scientific innovation for small following extensive refurbishments. GS90 GS Destinations Compendium 2010 www.globalservicesmedia.com

(Source: www.kelioniumanija) Brno Czech Republic The Growth Engine of Southern MoraviaB rno—Czech Republic’s second-biggest city by Quick Facts economic activities and third-largest city by City Brno area—is the capital of the South Moravian Region Eastern Europe Region. It is situated in the central part of Country Czech RepublicEurope and within its 200-kilometer radius lie other impor- City Population 1,151,500 (Dec 2009 est.)tant European capitals: Prague, Vienna, and Bratislava. City Average Monthly Entry Level US$1,118 As the growth engine of the Southern Moravian region, Salary (in US$) per month (BPO)this city hosts a wide range of universities and institutions, City Average Monthly Entry Level US$1,574and is the second-largest center of education in the Czech Salary (in US$) per month (ITO)Republic. The large number of universities here attracts grad- City Real-Estate Cost US$11–21uates who prefer to remain here rather than move to Prague. Major Service Providers in the IBM, Accenture, Infosys,This region’s highly qualified workforce -talented information City Microsoft Innovation Center,technology professionals- is fluent in multiple languages. Red Hat, Grisoft, Atento, Czech In recent years, Brno has become an investors’ base with Technical center, IBA Group,relatively new types of foreign investments such as technol- SDE, Monster Worldwide, Progeon, DSG International, IDSogy parks, developmental and shared service centers, and Scheer, AVG Technologiesvoice service centers. This capital offers advantageous state Primary Language Spoken Czechand city support for investment and a qualified and adapt- Other Languages Spoken Czech, German and Yiddishable workforce at favorable labor costs. Literacy Rate 97percent Brno achieves the second highest amount of FDI in the Time Zone GMT +0100country, after Prague. With the arrival of foreign investment,there has been a marked expansion in strategic services. Currency Czech Koruny (CZK) Exchange rate $1= 18 CZK Czech Technological Park of Brno is a joint invest- Unemployment 11.35percent (Jan 2010)ment by the City of Brno and the British multinationalfirm P&O, in close cooperation with Brno PolytechnicUniversity. It provides home to a number of leading com- intensifies with some locations becoming expensive andpanies, including Honeywell Controls, Siemens, Star 21 some getting saturated, the Czech Republic has managedNetworks, Bobst Eastern Europe, SGI, Bovis Lend Lease, to maintain its position as one of the world’s most attrac-Southern Moravia Center for Innovation, Timken Czech tive locations for FDI.Republic, Vodafone Czech Republic, As per Ernst & young EuropeanIBM Global Services Delivery Center Attractiveness Survey from 2009,Czech Republic, Control Techniques With the arrival of for- Central and Eastern Europe is consid-Brno, FEI Czech Republic, Phoenix eign investment, there ered to be the most attractive businessContact, ENERGO-PRO Czech, has been a marked locations and rank ahead China, India,CSC Computer Sciences, and Symbol expansion in strategic Russia, and Western Europe. The CzechTechnologies. market of information and communi- As competition between countries services here. cation technologies (ICT) recorded aand regions for cross-border investment turbulent growth in recent years. GS91 GS Destinations Compendium 2010 www.globalservicesmedia.com

Budapest HungaryEurope’s City of the FutureT he global ICT sector is presently undergoing Quick Facts a rash of mergers and acquisitions, and the City Budapest Hungarian ICT sector is no exception to this Region Eastern Europe trend. The main strengths of Hungary are its Country Hungarylow employment costs, good IT and communication infra- City Population 3271110structure and the profile of its capital city Budapest. Major Service Providers in Convergys, InfomatiX, Genpact, Budapest is split into two distinct sides: Buda and Pest. the City TCS BPO, Getronics, EPAM, Unisys,Buda side is more peacefully residential and quieter than Siemens, Synergon, Ericsson andthe Pest side. Almost 60 percent of Hungary’s industry are Nokia, Cognizant, IBM, Sykes,focused around Budapest. GE, Diageo, IT Services EDS, ExxonVodafone, Mobil, GE, Dell, As per Financial Times’ fDi Magazine, Budapest ranks Capgemini, and Morgan Stanleythird in European Cities and Regions of the Future Primary Language Spoken Hungarian2010/11. This ranking is on the basis of cost effectiveness, Other Languages Spoken English, Germanquality of life, economic potential, infrastructure, businessfriendliness, human resources and FDI promotion strategy. Time Zone CET (UTC+1)As a result of its liberalized investment policy, Budapest has Currency Hungarian forint (HUF) Exchange ratea conducive economic environment. However, there is a Unemployment 9 percentsubstantial number of trained work force and highly quali-fied employees, still the employee compensations are low. Hungary upholds a healthy economic growth through region (Budapest).this post-EU accession period. In recent times, it has wit- Some of the notable companies based in Budapest arenessed a changeover from central economy to a market- Convergys, Infomatix, Genpact, TCS BPO, Getronics,oriented economy. Its inflation figures have also dropped EPAM, Unisys, Siemens, Synergon, Ericsson and Nokia,in this period. Hungary continues to show a healthy eco- Cognizant, IBM, Sykes, GE, Diageo, IT Services EDS,nomic growth through this post EU accession period. ExxonVodafone, Mobil, GE, Dell, Capgemini, and Budapest offers a highly skilled and diverse workforce, Morgan Stanley.with broad language skills and technical and customer fac- LogMeIn - with its headquarters near Boston and itsing skill sets. This city has relatively low property costs and engineering base in Budapest- plans to tackle giants likehas the reputation for strong technical/R&D skills. But, Cisco Systems, Microsoft, and IBM, with an easy-to-usethe increasing labor cost is one of the major factors that has product for holding meetings and exchanging informationbecome headache for most of the companies. over the Web. In a recent survey by According to a report pub-Mastercard Worldwide, Budapest lished late last year, 10,000ranked third in the economic Almost 60 percent of Hungarians were engaged inand commercial environment Hungary’s industry is focused call centers in the Budapestcategories. Moreover, unemploy- region. Besides research centers,ment rate is the lowest (7.5 per- around Budapest. technological parks also facili-cent) in the central-Hungarian tate the clustering of high-tech92 GS Destinations Compendium 2010 www.globalservicesmedia.com

city Profile � budapest For the city of Budapest, GDP 9000 per head (based on PPP) stood 8000 at approximately $35,000 in 7000 2008. As per Prices an Earnings, Budapest has one of the lowest 6000 gross earnings. The average gross 5000 monthly salary is $1,264.33. The 4000 average pre-tax wage in 17–24 age group is approximately $851.878. 3000 In the past 15 years, Hungary 2000 has become a major address for for- 1000 eign capital. Cumulative FDI has reached over $79,867,831,745.73, 0 whereas investment growth has Czech Slovakia Hungary Bulgaria Poland Romaina Republic risen year after year. The figure below shows FDI stock per capita Source: wiiw, FDI statistics, 2009, ICEG, 2010 in the CEE region, 2009. Budapest also boasts of thecompanies such as: T-Online, IBM, HP, Compaq, Black infopark, which is the first innova-Hole Software, Ericsson, Tata Sons, Canon, GraphiSoft, tion and technology park in Central and Eastern Europe.Microsoft, Thales Nanotechnology, Zalaegerszeg, komárom Encompassing the 2007–2013 fiscal years, government is– Foxcom, Nokia, etc. exploiting different measures to promote broadband access The information, communications, and technology in the second national development plan in Hungary.(ICT) sector in Hungary has grown in recent years, and Hungary has made steady progress in eradicatingthe country has come forth as one of the most developed pirated IT materials from the marketplace since 2003-outsourcing markets in the region. This destination has a when Hungary was placed on the Priority Watch List forservice-based economy, with industry and agriculture con- IP violations-composing primarily of patent and datatributing less than 35 percent of GDP. exclusivity issues. GS SNAPSHOT➤ As per Financial Times’ fDi Magazine, Budapest ranks third in European Cities and Regions of the Future 2010/11. This ranking is on the basis of cost effectiveness, quality of life, economic potential, infrastructure, business friendli- ness, human resources and FDI promotion strategy.➤ Budapest boasts of the infopark, which is the first innovation and technology park in Central and Eastern Europe.➤ In the past 15 years, Hungary has become a major address for foreign capital. Cumulative FDI has reached over $79,867,831,745.73, whereas investment growth has risen year after year.➤ Hungary has made steady progress in eradicating pirated IT materials from the marketplace, since 2003-when Hungary was placed on the Priority Watch List for IP violations.93 GS Destinations Compendium 2010 www.globalservicesmedia.com

Buenos Aires aerial view Buenos Aires Argentina The Frugal Man’s Outsourcing Paradise B uenos Aires is the capital of Argentina. One Quick Facts of the largest cities in South America, it is the City Buenos aires financial, industrial, commercial and cultural Region South America center. Also one of the world’s leading ports, Country Argentina it lies on the Parana River, near where the river enters the City Population 14,400,000 Atlantic Ocean. City Real-Estate Cost US$65 per square foot Buenos Aires is the second-largest metropolitan area in Major Service Providers in the Microsoft, Intel, Motorola, South America, after São Paulo. The city’s service sector is City IBM, Hewlett Packard, Wipro, diversified and well-developed by international standards TeleTech, TCS, Latin3, Sabre, and accounts for 76 percent of its economy (compared to Ceitech, Google, MCI, etc. 59 percent for all of Argentina’s). Primary Language Spoken Spanish With 14.4 million inhabitants, it has 38 percent of the Other Languages Spoken English, Portuguese, Italian, nation’s population and 35 percent of the country’s eco- German, French nomic activity. In the city, the workforce numbers about Literacy rate 96 percent 1.4 million people, with about 36 percent involved in serv- GDP $245B ices, 18 percent in trade, 17 percent in manufacturing and Time Zone GMT -0300 about 12 percent in finance, insurance, and real estate. Currency Argentine peso (ARS) Buenos Aires, a recognized player on the global BPO Exchange rate ARS1.00 = USD 0.251889 scene, continues to be a frugal man’s paradise. This des- Unemployment 9.1 percent tination is growing at double-digit rates in terms of both volume and value of the electronic commerce and payment are becoming stronger, as education in English is being business. encouraged. The city has low attrition rates. Currently, it is ranked 269 overall, most expensive place As regards office space, Buenos Aires posseses Class A in the world for expatriates to live, out of 300 interna- office space. However, vacancy rates are on the decline tional locations. However, electricity is 30–60 percent less because of high demand leading to rising sales and lease expensive than United States - the average cost for power is rates. US$0.04 per kilowatt per hour. Property is affordable; the The city can serve US markets effectively as Argentina median sale price per square meter of office space is around lies in the same time zone as the East Unite States. When $65 per square foot. speed of response and deadlines become an issue in projects, Buenos Aires has a large talent pool and a number of working with people in a similar time zone becomes a cru- reputed educational institutions, capable of supplying cial component to a smooth and effective work process. workforce to the IT–BPO industry. Argentina’s cultural This city’s time zone offers the added advantage- it is one closeness and linguistic similarity with Europe is an added hour ahead of Eastern Standard Time (EST-USA), 4-5 advantage, as it allows the country to additionally tap busi- hours ahead of Pacific Standard Time (PST-USA), and 3 ness from markets in Europe. hours behind Greenwich Mean Time (GMT-Uk). Spanish is the official language, but Portuguese and The IT–BPO industry (high-tech sector in general) is English are also spoken in the city, which provides multi- growing rapidly and has been prioritized and encouraged lingual services. English language skills of the population through incentives by government. The Software Law 94 GS Destinations Compendium 2010 www.globalservicesmedia.com

city Profile � buenos airesestablishes that software production is to be considered as a This complex, energetic, and seductive port city, whichproductive transformation activity and accorded the same stretches south-to-north along the Rio de la Plata, has beenpriority and incentives as other industrial activities. the gateway to Argentina for centuries. Buenos Aires, one of the main markets in Latin America The growth of Argentina’s IT-BPO industry duringand in the world, is the ninth most populated urban con- recession was adversely affected. However, in the last fewglomerates in the world. It is the 13th urban center with years, a large number of multinational companies have setthe largest income in dollars in the world, ahead of cities up their operations in Buenos Aires. This industry has beenlike Hong kong, Miami or Sao growing rapidly since then, mak-Paulo, and its growth prospects ing it one of the fastest grow-are excellent. Class A office space is on ing sectors in the economy. The Unlike much of the rest of the decline because of high prominent services from Buenosthe country, this city has a varied Aires include software develop-economy, which helps it main- demand leading to rising sales ment, call center, back-officetain a degree of stability, despite and lease rates. operations (such as data process-the rampant inflation that has ing) and creative services (suchoften burdened the entire coun- as design and media services).try. This region maintains low debt levels and debt service Buenos Aires has seen a lot of movement and changerequires less than 3 percent of the total budget. due to the arrival of multinational companies establishing known as the Paris of South-America, its GDP (Gross their regional hubs and offices in the city. Global giantsGeographic Product) almost triples the average income per with the likes of Google and MCI have set up shop in thiscapita in Argentina. region. GS SNAPSHOT➤ The prominent services sourced from Buenos Aires include software development, call center, back-office operations (such as data processing) and creative services (such as design and media services).➤ The Software Law establishes that software production is to be considered as a productive transformation activity and accorded the same priority and incentives as other industrial activities.➤ Some of these incentives encapsulate: lower turnover tax rates and exemption from provincial taxes, benefits in municipal fees, access to financing with preferential terms and discounts on services such as electricity, gas, water and communications.➤ known as the Paris of South-America, its GDP (Gross Geographic Product) almost triples the average income per capita in Argentina.➤ This city can serve US markets effectively as Argentina lies in the same time-zone as the East Unite States.95 GS Destinations Compendium 2010 www.globalservicesmedia.com

Cairo Egypt“The Victorious City” of the Middle EastC airo—the capital of Egypt and the largest Quick Facts city in Africa—means “the victorious city”. City Cairo The economy of Cairo was ranked first in Region North Africa the Middle East, and 43rd globally by Foreign Country EgyptPolicy’s 2010 Global Cities Index. City Population 78,866,635 (2009) It is the chief commercial and industrial center of City Real-Estate Cost $1,322 per square meterEgypt. The majority of the nation’s commerce is generated Major Service Providers in Oracle, Orange, Microsoft, C3,here, or passes through the city. Majority of publishing the City Convergys, EDS (HP), Raya Contacthouses and media outlets and nearly all film studios are Center, Tamima, Xceed, Unisys, IBM,settled in Cairo, as are half of the nation’s hospital beds Vodafone, Alcatel-Lucentand universities. Primary Language Spoken Arabic Increase in population of Cairo shows an upward trend. Other Languages Spoken English, French, Italian, German,One-third of the total population is under 15 and nearly Spanishthree-fifth is under 30. The positive implication is that Literacy rate 71percentthe population is relatively young. The most populous GDP $328.1Bmetropolitan area in Africa, it ranks 16th among the most Time Zone GMT + 2populous metropolitan area in the world. Majority of the Currency Egyptian pound (EGP)population is Egyptians, with less number of foreigners. Exchange rate $1= 5.77 EGP Cairo is the economic center of Egypt, with two-thirds Unemployment 11.4percentof the country’s gross national product generated in thegreater metropolitan area. Today, the majority of its work cities. This destination’s multilingual workforce, businessforce is employed in service sector jobs, especially in gov- analytics, and testing services act as its strongest key func-ernment, financial services, and commerce. English and tions. In addition, allure of this city is that it is a low- costArabic are commonly spoken in this destination along base, embraces the large supply of skilled multilingualwith German, French, Spanish, and Italian. agents, has an amazing geographical position and it is eco- Egypt is one of the world’s fastest growing locations nomically and politically stable.for global outsourcing and services, and has seen huge Egypt hopes to see a tenfold increase in exports frominvestments in the last year, with companies such as EMC, its growing outsourcing industry by 2020. It will boost itsStream Global Services, and Sykes Enterprise, collaborat- focus on information technology (IT) entrepreneurshiping with Information Technology Industry Development and co-ownership of intellectual property. Egypt’s econo-Agency (ITIDA) and outsourcing their business in Egypt. my, buoyed by rising exports, could grow by 5.5 percentIt should be noted, Egypt is fast becoming one of the in fiscal 2010/11 and attract $10B in foreign direct invest-world’s most attractive locations for global outsourcing. ment (FDI) as it recovers from the global economic crisis.Currently, most foreign companies -locating IT and BPO There are also extremely attractive tax breaks and associ-positions- in Egypt use Cairo as their base. ated financial incentives available to foreign companies, so Industries in Cairo have developed fast, churning out Egypt looks attractive on price, too. The typical per-seatnew job opportunities for the natives. This city has been cost for a call center is around $15,000—a highly competi-recognized as one of the world’s top ranking offshoring tive figure.96 GS Destinations Compendium 2010 www.globalservicesmedia.com

city Profile � cairo From its inception, Cairo’s economy has been based on around 40 employees, but plans to expand to 300.governmental functions, commerce, trade, and industrial One business park, designed for BPO and ITO deliv-production. It is an outsourcing haven, with its vast dedi- ery, is currently being built-in downtown Cairo. Maadicated technology and outsourcing park in Smart Village, Park will have the capacity for 45,000 employees in overand the development of Maadi Park, which will house in 40 buildings in 2 million square meters. Operationsexcess of 135,000 employees. Smart Village, the Egyptian are expected to begin there later this year, with comple-ICT hub located in the suburbs of Cairo, offers facilities tion scheduled for 2012. As well as expanding capacity,for more than 35,000 people and Maadi Park offers a more con-is home to a growing number venient location, being closer toof regional and international central Cairo and having bettertechnology vendors including Smart Village, the Egyptian transport links—it will be nearVodafone, Ericsson, Microsoft, ICT hub located in the suburbs the city’s metro network. Whileand Oracle. Additional Smart of Cairo, offers facilities for there are plans to build businessVillage offices are being planned more than 35,000 people and parks in other cities in Egypt,for Alexandria to accommo- currently nearly all ITO anddate the countries fast-growing is home to a growing number BPO work is located in Cairo’sICT industry. Mobile phone of regional and international Smart Village.network operator Vodafone has technology vendors Some major names, such as800 contact center agents in Oracle, Orange, and MicrosoftCairo serving the domestic, Uk, have set up captive operations inAustralian, and New Zealand Cairo, while major IT outsourc-markets. Network technology provider Alcatel-Lucent has ers such as IBM and EDS (HP) have had presence here for300 technical support staff in Cairo. Local contact center many years.outsourcing provider xceed has 1,900 employees in Cairo The largest expansion plans are also Cairo centric, withsupporting customers across Europe, the United States, the previously discussed Maadi Park location, which isCanada, and the Gulf. Satyam opened a center in Cairo in being developed currently. The options of where to locateJuly 2007, from where it does some application develop- are limited outside Cairo’s Smart Village, while there arement. Wipro gained a presence in Egypt with the acquisi- plans to build other parks in other Egyptian cities, thesetion of development center New Logic. Currently, it has are still in the planning phase. GS SNAPSHOT➤ Cairo is the economic center of Egypt, it generates two-thirds of the country’s gross national product.➤ Extremely attractive tax breaks and associated financial incentives are available to foreign companies. The typical per-seat cost for a call center is around $15,000—a highly competitive figure.➤ The largest expansion plans are also Cairo centric such as Maadi Park location. Maadi Park will have the capacity for 45,000 employees in over 40 buildings in 2 million square meters.➤ Egypt hopes to see a tenfold increase in exports from its growing outsourcing industry by 2020 and will boost its focus on information technology (IT) entrepreneurship and co-ownership of intellectual property.97 GS Destinations Compendium 2010 www.globalservicesmedia.com

Chandigarh IndiaBuilding Social InfrastructureC handigarh is the first ‘planned’ city of India. Quick Facts known for its architecture, urban planning, City Chandigarh and ambient environment, it is one of the best- Region South Asia managed cities in India. It is very well-con- Country Indianected to all major centers of the region and New Delhi, City population 1.297 million (2009)capital of India. With a population of about $1.297M Major service providers in the Dell, Infosys, Quark, Ranbaxy,(2009), Chandigarh’s per capita income is the highest in city Reliance, and SatyamIndia at $2,430.73 in 2007–08. Software exports $182,371,022.91 (2009–10) Chandigarh’s strength lies in its social infrastructure, Software exports from RGCTP $159,385,089.56 (2009–10)which has led to the growth of major IT companies in this Primary language spoken Hindi, Punjabicity. Apart from infrastructure, its proximity to Delhi and Administrative languages English, Hindilucrative IT talent pool attracts IT business centers. Major Literacy rate 81.94 percent (2001)multinational corporations and Indian firms such as Dell,Infosys, Quark, Ranbaxy, Reliance, Satyam, IBM Daksh, GDP USD 2,177 Million (2006–07)ICICI Prudential (for software development), Taurus Agile, Time zone GMT/UTC + 05:30 hourIndiWork Software Solutions Private Limited, Netgains Currency Rupee (INR)Network Solution, Promatics Information Services, Exchange rate 1USD = 45.3100INRUniSolsInfosyatems, Voicepack Infotech Private Limited,Chandigarh Infotech center, Inde-Dutch System India and Administration has been working on the development ofSmartData have offices in this destination. Infosys, one human resources and has set up bodies like the Chandigarhof the largest IT companies in India and the world, was Training On Soft Skills (CTOSS) Programme and Societyamongst the first to set up operations in the city. for promotion of IT in Chandigarh (SPIC). In the last one decade, this destination has seen rapid In Chandigarh, companies are mainly engaged ingrowth and has been emerging as the “knowledge Hub” services such as Information Technology (IT), IT Enabledof the north. Services (ITES) consisting of inbound and outbound Developed land, dedicated telecom bandwidth and BPO and training center, search engine optimization andtelephone exchange, and other pivotal facilities such as Internet marketing solutions, global IT solutions like soft-banking and public transport makes it a highly suitable ware development and consultation (viz. delivering cost-office space for MNCs and corporate alike. Chandigarh, effective software solutions and web services to small and“The Silicon Valley of North India,” has all the trap- medium enterprises), E-Commerce, website designing &pings of being a technology city—good living standards, development and CMS programming solutions to clientscosmopolitan outlook, skilled manpower, and excellent in USA and Europe and sale and maintenance of serverinfrastructure. These factors attract IT/ITES/BPO invest- and desktops to customers from defense, banks, researchments in the city. institute, and central government offices. Chandigarh houses many institutes of higher learn- The IT companies in Chandigarh are mainly locateding, such as the Punjab Engineering College, Chandigarh in Rajiv Gandhi Chandigarh Technology Park (RGCTP)Engineering College, Punjab University, and the and at the DLF campus. RGCTP is a major step in the ITPostgraduate Institute of Medical Research. The Chandigarh industry of Chandigarh. Several national and multinational98 GS Destinations Compendium 2010 www.globalservicesmedia.com

city Profile � chandigarhIT companies are generating investment and employment invest into Chandigarh. They aim to create an appropriateopportunities to the region by setting up shops here. industrial setup, improve the quality of the life of people, Now more than 10,000 professionals are working in set up the right kind of business climate for various sectorsRGCTP and an investment of more than $ 219,466,300.10 of Chandigarh and contribute to the overall developmenthas poured in. It is estimated that once completed, phase of the economy.I and phase II would provide direct employment to more In order to develop the requisite talent for knowledgethan 30,000 professionals, and an equivalent number Industry, a new state-of-the-art Education City is comingwould be directly employed in phase III taking the fig- up in Chandigarh, which will have world-class educationalure of direct employment from RGCTP to more than faculty and excellent infrastructure. Following are other60,000 professionals. Accordingly, the total investment for initiatives which will support Chandigarh is being an idealRGCTP will cross $1.3B. outsourcing destination. In 2009–10, the total export value of Chandigarh’s soft- A Cyber Security Research Center (first of its kindware industry reached $182.2M, which is $18.2M (about in the country) has been set up in collaboration with11 percent) more than $163.8M posted in 2008–09. NASSCOM and Punjab Engineering College for con-Software exports from RGCTP ducting high-quality research onalone aggregated $159.1M in cyber security issues involving2009–10 against $135.2M in Chandigarh, ‘The Silicon Valley the academia, IT Industry, and2008–09, up 18 percent. Exports of North India,’ has all the government security agencies.from the units located in other Apart from research on cyberparts of Chandigarh, declined trappings of being a technology security threats, it will also aidby about 25 percent to $ 22.9M city— developed land, dedicat- and advise the State Police offrom $28.6M ed telecom bandwidth and tel- the neighboring states in cyber Sanjay kumar, IT-cum- ephone exchange, skilled man- security matters.finance secretary, UT Society for Promotion of ITAdministration was quoted, power, excellent infrastructure in Chandigarh (SPIC) has estab-“Defying the meltdown, the IT and proximity to Delhi. lished centers of excellence inunits located in RGCTP regis- collaboration with Microsoft andtered a growth of more than 18 IBM. The students are trainedpercent in software exports in fiscal 2008–09. But those in Microsoft Certified programmes which help the ITlocated outside the technology park, registered a fall of Industry get trained manpower.more than 25 percent, pulling down the total growth C-TOSS, a programme for upgrading youths soft skillsrate to about 11 percent. It is estimated that the software and make them suitable for employment by the IT-BPOexports from RGCTP will cross $987.1Mby the end of industry has been started. Free training is provided in all2011.” government schools both in urban and rural areas enhanc- “The best year for the industry was 2008–09 when it ing employability of students. Free training is also beingregistered an increase of 48 percent in software exports. imparted to school drop-outs from underprivileged sec-In fiscal 2008–09, total software exports of IT companies, tions of the society under CITROP (Chandigarh IT Reachlocated in the RGCTP as well as outside, had risen to Out Programme).$164M from $110.5M in fiscal 2007–08, registering an All these policies by the government have madeincrease of 48 percent,”stated Mr. Sanjay kumar. Chandigarh a preferred location for the IT/ITES/BPO Chandigarh Administration has been framing several companies. GSpolicies, from time to time, so as to motivate investors to99 GS Destinations Compendium 2010 www.globalservicesmedia.com

Coimbatore IndiaSet to Scale New HeightsC oimbatore is the second-largest city in the Quick Facts South Indian state of Tamil Nadu. This city is City Coimbatore the second-largest software producer in Tamil Region South Asia Nadu, next only to Chennai. It is also the high- Country Indiaest revenue-earning district in Tamil Nadu. Major service providers in the Tata Consultancy Services, Wipro, Coimbatore is emerging as a IT/ITES destination due city Cognizant Technology Solutions,to an ideal combination of good business infrastructure Robert Bosch GmbH, Tata Elxsi,that includes telecom, power, quality of life, highly skilled KGISL, and CSS Corp Pvt Ltdworkforce, low-cost of living, low pollution, and rapid Primary language spoken Tamil, Englishpace of infrastructure development. Other languages spoken Telugu, Kannada, and Malayalam Tata Consultancy Services (TCS), Cognizant Literacy rate 78 percentTechnology Solutions, Robert Bosch GmbH, Tata Elxsi, Time zone GMT/UTC + 05:30 hourkGISL, and CSS Corp. Pvt Ltd have set up centers in the Currency Rupees (INR)city. IT major Cognizant was one of the first major players Exchange rate 1USD = 45.3100INRto start a development center in this destination, opened atechno-campus in 2009 with a capacity to employ 6,000 are three universities, five deemed universities, 25 engineer-professionals. Its vice president, Vishnu Potty, admits to ing colleges, 14 polytechnics, more than 65 arts and scienceCoimbatore being a strong sourcing base for its operations colleges, 44 MBA institutions, and other colleges. It produc-across India. es more than 30,000 engineering graduates every year, thus In August 2010, Tidel Park -a 56-acre IT park- was boasting of an excellent human resources pool. Retention ofinaugurated in Coimbatore. IT and ITES companies talent pool has been a strong point for most of the playerswould occupy nine lakh sq ft space in Tidel Park. It is establishing a presence in Coimbatore. The IT majors hire 10expected to provide employment to over 12,000 profes- percent–15 percent of their total recruits from Coimbatore.sionals in one shift. This campus would house three major Also, it has the entire infrastructure required for anIT companies—Wipro, TCS, and HCL, while more than industrialized economy. Many airlines connect Coimbatore40 companies have shown interest to start operating out with metros namely Chennai, Bengaluru, Mumbai, Delhi,of this IT-SEZ campus. In addition, Tidel Park holds a lot Hyderabad, and overseas cities such as Sharjah, Singapore,of importance for small and medium enterprises (SMEs) and Colombo. The city is also well-connected by train tointending to conduct business from here, as operating major parts of India.from an SEZ will make them entitled to tax exemptions. Coimbatore looks all set to scale new heights as a pre- This city has a high literacy ferred destination for corporaterate of around 78 percent which firms to expand their businessis even higher than the national By 2014–15, the highest rev- presence. By 2014–15,average of 59.5 percent. One of enue-earning district in Tamil Coimbatore is likely to add closethe major reasons for this high Nadu is likely to add close to to 100,000 jobs, which will inliteracy rate is the strong educa- turn contribute to the growth intional policy of the government 100,000 jobs the per capita income of theand its world-class facilities. There city. GS100 GS Destinations Compendium 2010 www.globalservicesmedia.com

Colombo Sri Lanka The Backbone of Sri Lanka’s Economic StructureC olombo, former capital of Sri Lanka, serves as Quick Facts a major port and the largest financial center of City Colombo the country. It is the backbone of Sri Lankan Region South Asia economic structure. Country Sri Lanka Colombo has most of the amenities that a modern City population 656,000 (2007)city possesses. Compared to other parts of the country, Major service providers in the HSBC, WNS Global Solutions,Colombo has the highest degree of infrastructure. This city RR Donnelley, John Keellsdestination embraces considerably good stansards of elec- Computer Services, Just in Time,tricity, water, transport,road network, etc. Virtusa, and Astron Majority of the city population possess good English Primary language spoken Sinhalese, Englishlanguage skills, which makes it ideal for financial, telecom- Other languages spoken Tamilmunication, and healthcare sectors. Colombo now has Time zone UTC/GMT +5:30 hoursthe world’s largest pool of Uk qualified English-speaking Currency Sri Lankan rupee (LKR)accountants.It has 90,000 graduates, according to Census 1 USD = 111.6196 Sri Lankanand Statistics Dept. 2008. Exchange rate rupees This destination offers a rapidly growing niche work-force which is low-cost, highly adaptable and loyal. quality talent pool.Currently, over 50,000 are employed in IT and BPO In September 2010, MphasiS opened their global deliv-industry and the workforce is growing at over 20 percent ery center in Colombo. “There were three main reasonsyear-on-year. The workforce is stable with very low attri- to select Sri Lanka apart from other countries. One oftion rates ranging from 10 percent to 15 percent. A recent the main reasons was the educational IT institutions andWorld Bank study revealed that the country’s labor costs to build deeper roots with the talent supply chain in Sriranked the lowest, in comparison to many other outsourc- Lanka. The other reason was that the Government of Sriing destinations. Its labor cost is 15 percent to 20 percent Lanka has much enthusiasm for a sustainable economiclower than India. The total cost per associate can be as growth. The keenness of the Board of Investment (BOI)much as 30 percent lower in many cases. Also, there is a played an important role in redefining the IT landscapelower upward wage pressure than many established global in the country. This caused MphasiS to set up the globalsourcing destinations. delivery center in Sri Lanka,” MphasiS CEO Ganesh In addition, this city’s geographical location, infra- Ayyar was quoted.structural facilities, direct access to Indian market, high “We want to surprise MphasiS by showing the capabili-quality standard of workforce, open economy, and various ties of the Sri Lankan talent. The country s exports will befree-trade agreements make this place an attractive out- measured in Billions of dollars and replace the millionssourcing destination. HSBC, WNS Global Solutions, RR very soon. The employees that joined the company todayDonnelley, John keells Computer Services, Just in Time, should also focus on providing their best to prove that SriVirtusa and Astron are some of the companies which have Lanka can,” Board of Investment chairman Jayampathiinvested in this city. The growing IT-BPO industry in Bandaranayake was quoted.Colombo offers a unique advantage for small and medium The IT-BPO industry has been identified as a thrustenterprises (SME) to enjoy premium access to a high industry by the government of Sri Lanka. Recognizing101 GS Destinations Compendium 2010 www.globalservicesmedia.com

city Profile � colombothe potential of this industry, the government has taken As part of a new FDI policy expected to be includeda number of positive steps - providing fiscal and other in the country’s 2011 budget, Sri Lanka may scrap someincentives and concessions- to fast track the development tax concessions which had been offered to attract foreignof this sector. investors during the protracted war. The national level competency development programs Sri Lanka had targeted $1B in FDI in 2010, an opti-focus on building Sri Lanka as a Center of Excellence mistic aim over the economy after the end of a 25-year(COE) for key domain areas. Software services sec- war. But the Board of Investment has said it may reachtor focuses on Telecommunication, Banking Financial only around $600M, almost the same amount that cameServices and Insurance (BFSI) and Software Testing. The in 2009.BPO sector focuses on financial and accounting services, Sri Lanka’s BOI said that it will prioritize approvalsinvestment research, engineering services, and Uk-based of investment into specific sectors, as part of its thrust tolegal services. revive the country’s economy, Earnings from exports of after the end of a three-decadeIT-BPO sector of Sri Lanka have The city’s geographical loca- war. Foreign investments intoshown a steady upward trend tion, infrastructural facilities, IT, outsourcing, tourism, agri-during the past decade. The culture, fisheries, education,industry has set a target of $ 2B direct access to the Indian mar- infrastructure, ports, and avia-in export revenue from IT-BPO ket, high quality standards of tion will take precedence oversector by 2012. the workforce, open economy, all others. “For these particular Foreign direct investment and various free-trade agree- sectors, we will give highest(FDI) into Sri Lanka fell 16.8 possible importance. We wantpercent to $208M in the first six ments make it an attractive to develop these sectors,” BOImonths of 2010, compared to outsourcing destination. spokesman Dilip Samarasinghe$250M in the first-half of 2009. was quoted.In 2008, the country’s FDI hit According to World Bank,a record $889M, but fell in 2009 to $602M due to the Sri Lanka’s investment climate must be improved and costglobal downturn. of doing business reduced, to attract the private invest- Sirimal Abeyratne, a senior economics lecturer at the ment needed to speed up growth. Sri Lanka has beenUniversity of Colombo was quoted saying, “War was one ranked at 105 out of 183 countries in the World Bank’spart of a problem. Uncertainties are still there, and the latest cost of doing business index. It has been slidingeconomic policies are not favorable to foreign investments. down the ranking scale. So, the country needs to increase(Foreigners) are not certain about the macro economy in private investment to about 27 percent of Gross Domesticthe long run. The reform process has not yet started, and Product, from the current 19 percent, to speed up eco-the government policy document itself is against foreign nomic growth to the levels needed to improve the lives ofinvestments, blaming the open economic policies.” most people. GS 27 January, New York “Other outsourcing conferences do not have a good mix of Buyers and Sellers. Most of the time it is lot of sellers. So I think, it’s a good mix, you get to hear from the buyers prospective which is very important” . -Global Services Conference 2010 Attendee Know More102 GS Destinations Compendium 2010 www.globalservicesmedia.com

Curitiba Brazil One of South America’s Rising HotspotsC uritiba, capital and largest city of Brazilian Quick Facts state of Parana, is an outsourcer’s dream. With City Curitiba a population of approximately 1.8 M (2009) Region South America people, Curitiba is the seventh-largest city in Country BrazilBrazil. City population 1,851,215 (2009) Favorably located among sourcing hotspots Sao Paulo, City real estate cost Apartment for buying: US$Buenos Aires, and Santiago, it has been making a name 1,105.39 per square meteras a growing IT hub. In last two years, several large off- Apartment (1 bedroom) for rent:shore outsourcing operations were established in Curitiba US$ 295.67per square metersuch as Accenture, HSBC Global Technologies, Siemens, Major service providers in the Accenture, HSBC GlobalExxonMobil, Atos Origin, and Wipro. These outsourc- city Technologies, Siemens,ing centers were attracted by the high quality of life, ExxonMobil, Atos Origin, and Wiprolow wages, and excellent infrastructure support from the Primary language spoken Portuguese (official)city. In March 2010, Wipro technologies opened its Other languages spoken German, Italiannew global delivery center, Curitiba Center, in the Literacy rate 96 percentcity. This destination was chosen for Wipro’s Latin Time zone UTC-3 (UTC-3)America operation due to the available talent pool and Currency Real (BRL)the excellent infrastructure support that the city offers. Exchange rate 1 USD = 1.67964 Brazilian RealMayor of Curitiba, Beto Richa, made a statement thatthe city embraces best in life quality and infrastructure. percent literacy rate. It has 55 higher education institu-“Wipro Technologies is an innovation company and a tions, with five universities. About 157 technical coursesgreat employer brand, and its investments in Curitiba are given by 88 institutions. Curitiba has the highest per-will bring even more knowledge to our city and state,” centage of English schools per capita in Brazil. Thus, thereBeto was quoted. is a sizeable talent pool. Curitiba is known for its strong infrastructure, attrac- This destination is famous as an IT-friendly city. The taxtive economy, and savvy urban planning. “you can get incentives and support from the city really helps to build aanywhere in the city in less than 25 minutes by car. And good business environment. The Curitiba Offshore Center,the quality of life is so good that we can attract profession- an association of the local IT companies in Curitiba, pro-als even from Sao Paulo and Rio, who often don’t mind vides valuable support and information for US firms con-the lower wages here,” Jacques Depocas, Global Head of sidering setting up there. In addition, municipal govern-Center Operations at HSBC Global Technologies was ment has established the Curitiba Technopark—specificquoted. According to Depocas, Curitiba also has one of regions in the city, that integrate and interconnect univer-the best banking and financial service systems in the world, sities, IT companies, and R&D institutions in both publicone of the reasons that HSBC is set up here. The cost of and private sector. There are incentives for larger compa-living is also estimated at up to 30 percent lower than in nies to locate in the Technopark such as a reduced sales taxlarger Brazilian cities. to 2 percent and a 10-year exemption of real estate and Curitiba has a very educated workforce, with a 96 other municipal taxes. GS103 GS Destinations Compendium 2010 www.globalservicesmedia.com

Dalian ChinaHandling 80 percent of Japan’s Outsourcing BusinessT he beautiful coast city of Dalian is located in the Quick Facts southern tip of China’s northeast region. Dalian City Dalian has a population of about 6 million (2009). It is Region East Asia the most developed city in the northern region Country Chinaof China, where the most talented of the 130 million City population 6 M (2009)Chinese citizens seek jobs. City average entry level salary Average annual salary is $7,056 Dalian boasts of the largest concentration of software (in US$) per month (ITO) (2009)outsourcing enterprises in China. This destination was Major service providers in the Fortune 500’s Intel, Starbucks,established by the Ministry of Commerce of China, as city Volkswagen and Bosch GROUP,the service-outsourcing base of the country. In 2009, total Toshiba, Panasonic, LG, STX,industrial output of software industry in Dalian exceeded and BT$60.2B and export value of service outsourcing industry Software and service outsourcing RMB 17.7 B (2009)amounted to US$1.4 B. revenue of Dalian HIDZ Dalian’s software industry has developed rapidly. From Export value from the software US$ 510 M (2009)1999 to 2009, the annual growth rate was 53.32 percent. and service outsourcing sector in Dalian HIDZSales profits are 72 times higher than a decade ago and Primary language spoken Standard Mandarinexport volumes too are 41times higher than a decade ago. Dalian is a well-suited destination for both BPO and Other languages spoken Dalian dialectIT outsourcing for the following reasons : it is the finan- GDP USD 55.5 B (2008)cial center of northeast China and has a large number of Time zone UTC/GMT +8 hoursforeign banks; it offers a good engineering education at Currency Renminbi (RMB or CNY)the well-known Dalian University of Technology, which is Exchange rate 1 USD = 6.64151745 Chinese yuanespecially useful for software companies looking for newemployees, it is close to Japan and korea and its geographiclocation gives it an advantage in attracting good outsourc- Oracle Corporation, etc.ing opportunities. • hinese companies: China Software & Service (CS&S), C Dalian Hi-Tech Zone and Dalian Software Park are Neusoft Group, Neusoft Institute of Information, Newthe two areas where IT and BPO companies have setups. Touch, DHC, Hisoft, etc.There are over 500 enterprises in the Dalian Software • European companies: British Telecom (UK), SAP Park, 41 percent of which are foreign-funded. Thirty-seven (Germany), Oostsourcing (A joint venture of AkylaFortune 500 companies including IBM, HP, Accenture, 40 percent, Better Be 40 percent, Insight 20 percent,Panasonic, Sony, Hitachi, NTT, Oracle, AVAyA, NEC, Netherlands)Fidelity, BT, etc. have established bases in Dalian. Many • Japanese companies: Alpine, Fujitsu Device, Hitachi, Japanese and korean companies have also set up centers NEC, Panasonic, OMRON, Sony, Sumitomo Wiringdue to the language capabilities. Systems, yokogawa Electric, HAL Film Maker, Jtekt, Major IT companies based in the software park are: MI Communication, etc.• S companies: BearingPoint, Citibank, Dell, U • Other companies: Satyam (India), Wistron (Taiwan), Accenture, Fidelity Investments, Genpact, HP, IBM, konica Minolta, DHC, Lüshun South Road Software104 GS Destinations Compendium 2010 www.globalservicesmedia.com

city Profile � Dalian Industry Belt Demonstration Room, etc. outsourcing industry in Dalian. Most of the IT work- As the core area of software and information service ers come from the numerous engineering schools of theindustry in the city, Dalian Software Park is now progress- universities in Dalian and other cities in the area, includ-ing toward the ‘Service Outsourcing Center of Northeast ing Dalian University of Technology, Dalian LiaotongAsia.’ University, Northeast University, etc. “The rapid growth of our software park in the past dec- Dalian now handles 80 percent of Japan’s outsourcingade can be attributed to effective government support, the business. Dalian also is unique among similar Chineseconcentrated industrial cluster, the internationalized qual- cities in the software industry business because of its busi-ity system, and improvements in our training system,” Gao ness operations model. Instead of operating strictly as aWei, president of Dalian Software Park Co Ltd (DLSP) state-owned business, Dalian Software Park operates as awas quoted. government-facilitated, privately run enterprise. Dalian High-tech Industrial Development Zone The Software School at the Dalian University of(Dalian HIDZ) consists of six areas including the Software Technology is China’s biggest software demonstrationPark. It is surrounded by universities and other educational engineering school. The Dalian Neusoft Institute ofinstitutions. The fact that a large number of universities are Information is among the earlier software institutes estab-located near Dalian HIDZ has proven useful for software lished at the university.development companies looking to recruit new employees However, this city is still not at par with top outsourcingwho can speak Japanese, korean, or English. The pil- destinations like India and Philippines. It faces some chal-lar industries of Dalian HIDZ lenges in outsourcing. Thoughinclude software and informa- running an outsourcing businesstion services, biotechnological In July 2010 the Finance in Dalian is cheaper overall, theresearch and production, and city struggles with providing amedicine and new materials. Ministry of China, announced competitive labor pool and still In the first-half of 2009, business tax exemption of lacks infrastructure comparedthe software and service out- 5 percent for outsourcing com- to other locations. Investmentsourcing industries of Dalian panies in 21 cities in China, costs in Dalian, especially laborHIDZ generated revenue of costs, are relatively high when$266,445,877.84 accounting for that will extend to the end of compared to those of other cit-90.3 percent of Dalian’s total. 2013 ies in Liaoning. Also, the areaThe export value from the soft- surrounding Dalian is less devel-ware and service outsourcing oped than the coastal areas ofsector in Dalian HIDZ rose 34.9 percent year-on-year and China in the east and south.exceeded US$ 510 M. Dalian still lags behind Beijing and China in software With an aim to expanding outsourcing business and research and development (R&D) capabilities. Dalian’scompete with India’s dominance in outsourcing indus- outsourcing business still is mostly focused on Japan,try, in July 2010 Finance Ministry of China, announced while its share of the global outsourcing industry is muchbusiness tax exemption of 5 percent, for the outsourc- smaller.ing companies that extend to the end of 2013.These tax Still, Dalian is well on its way to a stronger competitiveexemptions apply to all companies offering information position. “In the near future, the best opportunity fortechnology outsourcing (ITO), business process outsourc- development in China lies in technology and services out-ing (BPO) and knowledge process outsourcing (kPO) in sourcing. We will make good use of our solid foundation21 cities in China. and geographic advantage in our efforts to make Dalian In June 2010, the 8th China International Software the leading city of the global outsourcing industry,” xia,and Information Service Fair (CISIS) was held at Dalian Dalian’s mayor, was quoted. GSWorld Expo Center, attracting more than 700 companiesand over 20 countries and regions from around the world.The fair held six theme forums on the service outsourcing,software innovation, industrial trends, patent protection,project management and project innovation, of which theIT project management forum and the project innovationforum was held for the first time this year. More than 60,000 people are working in the software105 GS Destinations Compendium 2010 www.globalservicesmedia.com

Western-style buildings on Shamian Island(Source: Wikipedia) Guangzhou ChinaChina’s Software Export and Innovation BaseA s the capital city of Guangdong Province, Quick Facts Guangzhou is the political, economic, science, City Guangzhou technology, educational and cultural hub of Region East Asia the province. It is the prominent coastal city Country Chinain South China. City Population 10,334,500 (2009) Guangzhou’s location is advantageous; it has a wide City Average Monthly Entry Level $6,000service range, complete infrastructure and good city envi- Salary (in US$) per month (BPO)ronment, which are desirable for the business development City Average Monthly Entry Level $10,000of software enterprises and software professionals. Salary (in US$) per month (ITO) The major industries promoted in the zone include City Real-Estate Cost US$3014logistics, international trade, computer software and Major Service Providers in the IBM, Guangdong Visoinsky, HSBCprocessing industry. In 2009, Guangzhou’s GDP touched City Software, BEA, Cagemini, PCCW,¥911.28 B ($133.5 B), and the per capita income was TWO Group, China Elite Info,¥89,498 ($13,111). HDPG, Sierra Atlantic Guangzhou is a national software industry base and a Primary Language Spoken Cantones, Putonghua,national software export and innovation base. Out of the Other Languages Spoken Englishtop 500 companies, 35 have established software enter- Time Zone CSTprises in Guangzhou in the fields of data treatment and Currency Renminbi (RMB)embedded software development, banking, insurance, Exchange rate $1= 6.65 CNYtelecom, etc. This destination enjoys a superior positionin the development of application software and system function as the software and hardware environment suit-integration in addition to basic software (including system able for the software industry concentration. The manu-software and supporting software). The investment attrac- facturing industry has a big demand for software and ITtiveness of Guangzhou has led to the setting up of IBM’s services, which helps software industry to develop fast.software innovation center, Microsoft’s (China) industrial It is anticipated, that the software industry will havebase, Intel’s international security data solution center, over 2000 software enterprises with an annual growth ofBaishigao’s design center, etc. here. Besides the German 35 percent for software export and with an export valueRIB Group and Trans Cosmos from Japan have established of $1.2 B.software R&D, outsourcing, and training programs in Guangzhou Software Park has been a national outsourc-Guangzhou. ing base since 1999 and is the second-largest software In 2008, there were 385 direct investment projects in industry base in the nation, after Beijing. The city’s ties withGuangzhou. The total investment amounted to $16 B with its southern neighbor, Hong kong, has made Guangzhou aFDI totaling $5.9 B. The amount of FDI China received prime outsourcing center for Hong kong’s IT demands,climbed up for the fifth consecutive month in the end of customer service, and call centers.It is anticipated, that the2009, up 103 percent year on year to $12.1 B. software industry will have over 2000 software enterprises In recent years, Guangzhou annually invested over with an annual growth of 35 percent for software exportRMB500 M in the construction of software parks, which and with an export value of US$1.2 B. GS106 GS Destinations Compendium 2010 www.globalservicesmedia.com

Hanoi Vietnam Promising Destination for Domestic and Foreign InvestorsH anoi, the capital of Vietnam, is the national Quick Facts political and administrative center, the hub City Hanoi of culture, science, education, economy and Region Southeast Asia international relations. Because of its geo- Country Vietnameconomic and political significance, it is regarded as a City population 6.5 million (2009)promising destination for both domestic and foreign inves- City real estate cost Land to buy: $5,000 per sq mtors. Hanoi and Ho Chi Minh City account for over 90 (2008)percent of the outsourcing revenues of Vietnam. Apartment space to buy: According to Hanoi Department of Planning and between $300 and $1,000 per sqInvestment, in the first nine months of 2010, the city’s m (2008)GDP growth rate was estimated at 10.6 percent, about Major service providers in the IBM, GEMALTO, Teleperformance,1.86 times higher than the same period in 2009. Hanoi city Deloitte, Siemens, FPT Softwareis expected to gain 2010 GDP growth rate of over 10.5 Primary language spoken Vietnamesepercent. Therefore, the city is trying to reach the economicgrowth rate of 11 percent–11.5 percent. Other languages spoken Northern Vietnamese Figures by the General Statistics Office (GSO) of Literacy rate 97.9 percent (2009)Vietnam showed that in the first nine months of 2010, GDP growth rate 10.6 percent (Jan–Sep 2010)Hanoi’s trade gap reached nearly $10M, a two-fold Time zone ICT (UTC+7)increase from the city’s export turnover. Specifically, over Currency Dong (VND)the first nine months of 2010, total export value of Hanoi Exchange rate 1 USD = 19,655.7 Vietnamese dongbusinesses reached an estimated $5.59B, a 19.5 percentrise compared to the same period last year. The GSO stated Unemployment 3.24 percent (2009)that Hanoi’s export turnover of the whole year of 2010 willlikely hit $ 7.644B, up 20.8 percent. Hanoi. FPT Software had announced in October 2010 Pham Quang Nghi, secretary of the Ha Noi Party that it would invest $57M in a software park at the HoaCommittee, articulated that Hanoi would take the lead in Lac Hi-tech Zone in Hanoi. The project is expected toluring foreign investment and that there have been more generate 8,000 jobs, mainly in the software sector. FPTthan 8,000 projects worth a total committed capital of Software said that within the next 4 years, 80 percent of its$18B in the last few years. production will be conducted under outsourcing contracts Vietnam’s Ministry of Information and Communications and the remaining will focus on products, services andhas drafted a plan to develop the country’s IT industry. The solutions for the domestic market.plan envisages that Vietnam would be among countries The city of Hanoi has a population of 6.5M. Vietnam’swith the most attractive outsourcing industry and Hanoi large population shows a developing and potential market.would be in a group of 10 emerging cities for outsourcing. Besides, cheap production costs combined with the gov-The plan also aimed to attract over $5B in foreign invest- ernment’s support have been making Vietnam the mostment for the information technology industry. outstanding competitor in terms of price. IBM, GEMALTO, Teleperformance, Deloitte, Siemens, It is a center of abundant intellectual and talentedand FPT Software are among the key companies based in human resources. Here, there are more than 80 percent107 GS Destinations Compendium 2010 www.globalservicesmedia.com

city Profile � hanoiof scientists and managers in the country. According to Institute of Technology) have educational collaborationa recent report by Ministry of Science and Technology, with well-known universities all over the world.Vietnam has about 3,000 to 4,000 new IT students Vietnam has advantages over other countries in theevery year, of which half are software developers. known region due to its low labor costs and good location forfor their skills and diligence, Vietnamese IT students transporting products to other countries in Southeast Asiaemphasize potential of the future software industry in and other parts of the world.Vietnam. The business environment in Vietnam has become With its advantageous geographical position and more friendly. This has been affirmed by chairman andbecause it is an intersection of many land roads, railways, CEO of the Japan External Trade Promotion Organisationand air routes -from and to many provinces and localities (JETRO), yasuo Hayashi. After India and China, Vietnamin Vietnam, as well as many other countries in the world- is Japan’s biggest outsourcing software partner. HayashiHanoi is becoming a national transaction center and an stressed that more and more Japanese enterprises payimportant international transaction center. attention to Vietnam when they expand their operations Over the past 20 years, Foreign Direct Investment overseas.(FDI) in Hanoi has recorded enormous encouraging Vietnam now stands sixth among the economies Japaneseachievements, making funda- businesses want to expand theirmental changes in the city’s socio- sale activities in the next 3 years.economic life. yet, a number of Hanoi and Ho Chi Minh City It has also jumped two places toproblems have also emerged in account for over 90 percent stand at fifth place among theFDI attraction and realization, markets where Japanese partnersparticularly the risk of unbal- of the outsourcing revenues of wants to expand research and Vietnam.anced economic development,overloaded infrastructure, envi- 27 January, New York development (R&D) activities. However, Hayashi said, that sev-ronmental pollution, unhealthy eral Japanese enterprises are stillcompetition and business, conflicts between employers concerned about business risks in Vietnam, especially risksand employees.outsourcing conferences do not have a good mix of Buyers and Sellers. “Other from the country’s poor infrastructure and incomplete In 2008, the registered FDI reached a record high of legal system. Most of the time it is lot of sellers. So I think, it’s a good mix, youthe mosthear from$5,091M, of which $1,456M was realized. In 2009, given Vietnam needs to create get to favorable conditionsthe negative impacts of the global crisis, Hanoi,very important” the buyers prospective which is like many for foreign corporations so that they can produce and .other-Global Services Conference 2010 Attendee export hi-tech products here. cities and provinces, saw a sharp decrease in the Know Moreamount of projects, committed and realized capital. Vietnam faces some obstacles such as Internet connec- The first ones who recognized this potential and started tions, sometimes, can be painfully slow since there is nooutsourcing to Vietnam were small- and medium-sized fiber-optic broadband network. Another drawback is thesoftware companies in the United States. Vietnam realized lack of fluent English speakers, though this problem canthat to receive such attention and to build a dedicated be tackled as most communication is via e-mail.core of IT experts, there many things have to be done to Helping balance out these deficiencies are the country’ssupport IT education in Saigon, Hanoi, and other cities low wages -programmers earn about one-tenth what com-with potential in IT development. The famous universi- puter programmers make in the United States -, a youngties in Hanoi (Hanoi University of Technology, Vietnam and highly motivated workforce and low staff turnoverNational University Hanoi, Post & Telecommunications rates of about 5 percent. GS 27 January, New York “Phenomenal & an Excellent platform to meet lot of clients and other people from same industry. Good exchange of thoughts and ideas. I would definitely come back year after year and would highly recommend people out there to come and participate” . -Global Services Conference 2010 Attendee Know More108 GS Destinations Compendium 2010 www.globalservicesmedia.com

Ho Chi Minh City Hall Ho Chi Minh City Vietnam Home to Vietnam’s Software ParksH o Chi Minh City (HCMC) is the largest city Quick Facts of Vietnam. It has a population of 7.163 mil- City Ho Chi Minh City lion with a literacy rate of 97 percent. With a Region Southeast Asia rising economy, well-educated populace, and Country Vietnammodern facilities, it is considered the economic, cultural, City population 7.163 million (2009)scientific, and technological hub of Vietnam. It is the saf- Average annual salary of US$15,000– US$20,000est, fastest-growing city in Southeast Asia and is quickly software programmer (in US$)becoming an important hi-tech center of the region. Major service providers in the IBM, Intel, France The economic growth of the city is apparent in the city Telecom,Telstra, Compaq,increase of GDP per capita: in 2006 the GDP per capita Siemens, Fujitsu, Acer, Hewlettof the city was $730, in 2007 it was $ 2,100, and in 2009 Packard, Oracle, Paragonit was $2,800, compared to Vietnam’s average level of Solutions, Cyrus Intersolf$1,042 in 2009. Total revenue from QTSC US$100 Million software park Although the economic growth of the city between2005 and 2010 averaged just 11 percent, lower than the Primary language spoken Vietnameseset target of over 12 percent, because of the global financial Other languages spoken Chinese, English, Frenchcrisis and economic recession, it is still a high growth rate Literacy rate 97.9 percentcompared to the general context. GDP per capita $2,800 (2009) Outsourcing to Ho Chi Minh City generally falls into Time zone UTC/GMT +7 hoursapplication development and maintenance, product devel- Currency Vietnamese Dong (VND)opment and testing. Major IT companies operating in Ho Exchange rate 1 USD = 19,565.44 VietnameseChi Minh City include IBM, Intel, France Telecom,Telstra, DongCompaq, Siemens, Fujitsu, Acer, Hewlett Packard, Oracle, Unemployment 5.45 percentParagon Solutions, Cyrus Intersolf, etc. It is home to 3 successful Export Processing Zones, 15 total revenues amounting to $100M.industrial parks, 2 software parks, and 1 hi-tech park. These The QTSC software park is working towards attract-parks—the Quang Trung Software Park (QTSC), Saigon ing more local and foreign companies to invest. ChuHi-Tech Park, and the Tan Thuan Export Processing Tien Dung, general director of QTSC, said the companyZone—include software enterprises, dot.com companies, would make use of their experience acquired over theand software training schools. In addition, these parks years to map out a long-term development strategy. “Ourprovide residencies and favorable taxation for workers. three main goals are to attract the biggest enterprises and The QTSC software park has been in operation for 9 nurture small ones to turn the park into Vietnam’s biggestyears with a total area of 430,000 square meters designated software producer; supply high-quality human resourcesfor software production, research, training, development, to help the sector take off; and create a favorable businessand distribution. When it was established in 2001, QTSC environment to help firms thrive,” Dung said.attracted about 20 companies. Now more than 100 QTSC has become a well-known software park brandcompanies are in the park with 57percent of them being in the country. “As for future development plans, I think,foreign-invested companies. In 2009, the park reported it’s necessary to build a chain of Quang Trung Software109 GS Destinations Compendium 2010 www.globalservicesmedia.com

city Profile � ho chi Minh cityCities in other cities and provinces or even in foreign Lack of fluent English-speaking professionals is anothercountries to further promote the QTSC brand,” Le Manh problem.Ha, director of the HCMC Department of Information While corruption remains a matter of concern inand Communications, said. “When the QTSC brand Vietnam, government leaders say they are working tois well developed, it will certainly attract multinationals reduce red-tapism and bureaucratic processes. Most largewhose satellite companies can follow suit by setting up companies that outsource to India and the Philippines,shop at QTSC.” however, know how to handle this hurdle. The largest software park in Vietnam, the Thu Thiem Vietnam may still be some years away from gainingSoftware Park, is scheduled to come up by 2012 in Ho the prominence of an India, Philippines, or China, but itChi Minh City. has definitely emerged as a serious player in outsourcing These IT parks will help the city in particular and market.Vietnam in general to be an outsourcing place for other The Vietnamese government plans to invest aboutenterprises in developed countries. $58M in developing the software technology and digital Ho Chi Minh City boasts the best infrastructure in the industry by 2012. This plan will create favorable condi-nation, including modern transportation and telecommuni- tions for domestic IT companies to develop.cation systems. It is also the country’s center of higher edu- Vietnam hopes its information and communicationscation. There are over 80 univer- industry will comprise 8–10 per-sities and colleges with a total of cent of the gross domestic prod-over 400,000 students. The out- The largest software park uct in the next 10 years, accord-sourcing companies draw most in Vietnam, the Thu Thiem ing to the government’s ICTof their staff from graduates of Software Park, is scheduled to Development Strategy. UnderHCM City National University the strategy, Vietnam will striveand the University of Technical come up by 2012 in Ho Chi to become one of the world’s topEducation. Ho Chi Minh City Minh City. 10 high-tech outsourcing desti-has a young population with 65 nations for software and digitalpercent of people below 35 years content production. Vietnamof age. Salaries and cost of living in the city are lower than plans to develop 15 information technology parks tocapital Hanoi. support the country’s developing information and com- However, foreign direct investment (FDI) flows into the munication technology industry by 2020, according to thecity have declined in 2010. According to the Department Ministry of Information and Communications.of Investment and Planning of Vietnam, FDI into Ho Chi The software industry of Vietnam experienced a 40Minh City in the first 4 months of 2010 is estimated at percent surge with revenues of $880M in 2009. The gov-$526M, a drop of nearly 17 percent compared to the same ernment is also implementing a plan to improve humanperiod in 2009. resources in the sector. The government aims to have 30 The 4-month figure only accounted for 6.26 percent of percent of Vietnamese students ready to meet the out-the full year’s target, the department said. The city has tar- sourcing demands of foreign markets by 2015.geted $8.4B in FDI for 2010, or one-third of the national Deputy Minister of Vietnam, Tran Duc Lai, said theFDI target. new information technology will offer special prefer- The global outsourcing business relies largely on the ences to investors, in addition to offering specific taxquality of service that is provided, rather than the talent incentives under legislation that took force in Septemberpool, and in this respect Vietnam has still a long way to go. 2009. GS 27 January, New York “Other outsourcing conferences do not have a good mix of Buyers and Sellers. Most of the time it is lot of sellers. So I think, it’s a good mix, you get to hear from the buyers prospective which is very important” . -Global Services Conference 2010 Attendee Know More110 GS Destinations Compendium 2010 www.globalservicesmedia.com

(Source: www.aroundaboutcars.com)Johannesburg South Africa Corporate Headquarter of South AfricaJ ohannesburg is the epicenter of South Africa’s Quick Facts financial services industry. The city is one of the City Johannesburg 40 largest metropolitan areas in the world. It Region South Africa produces 16 percent of South Africa’s GDP and Country Middle East and Africaaccounts for 40 percent of Gauteng’s (one of the nine prov- City Population 7,550,000inces of South Africa) economic activity. The service and City Average Monthly Entry Level $1,000–$1,100other industries include IT, real estate, transport, banking, Salary (in US$) per month (BPO)broadcast, print media, private health care, transport, and City Average Monthly Entry Level $1,500–$1,600a vibrant leisure and consumer retail market. There exists a Salary (in US$) per month (ITO)large skill base that can be absorbed into growing the BPO City Real-Estate Cost $125 per square feetskills base. Johannesburg generates 16.5 percent of the Major Service Providers in the Microsoft, Call Center Nucleus,country’s wealth and employs 12 percent of the national City IBM Innovation Centers,workforce. Accenture, Mahindra Satyam, More than 70 percent of South African companies SAP, Lenovo, P&G, BeyondSoft,have their headquarters here. Many global companies TCS Design House, Direct Channel Holding, etc.such as Microsoft, Call Center Nucleus, IBM Innovation Primary Language Spoken AfrikaansCenters, Accenture, Mahindra Satyam, SAP, Lenovo,P&G, BeyondSoft, TCS Design House, Direct Channel Other Languages Spoken English, Ndebele, Pedi, Sotho, Swazi, Tsonga, Tswana, Venda,Holding, etc. have set up their strategic business units Xhosa, and Zuluhere. According to DIT (Durban Institute of Technology), Literacy Rate 82 percentITeS-BPO export is expected to reach $12.4B by 2010 GDP Johannesburg alone accounts forfrom $11.7B in 2009. 16 percent of South Africa’s GDP. South Africa has gradually established itself as a viable Time Zone BST (UTC-3)player in the global BPO market. Although South Africa Currency South Africa Randis not competing against tier-one players such as India, $1 = 6.98 ZARChina, and the Philippines at present, it is increasingly Unemployment 25.3 percentbecoming more attractive as a tier-two destination. Withstrong industry leadership and government support, thisposition can be strengthened in a significant manner. This can be ascribed to the dominance of the fast-growing Outsourcing activity within the local market is increas- financial and business services sector in Johannesburg’sing. This is attributed to the increased awareness of cost economy, which has consistently outperformed averagesavings and improved efficiencies associated with outsourc- growth rates. When Johannesburg’s growth is compareding. South Africa unlike other locations such as India and to that of other metros, the city consistently outperformsPhilippines has a well-established domestic outsourcing its counterparts. Its economy is much larger than any ofmarket. As a result, the country is considered to be a new the others and its Gross Value Added in 2004 was R204player in the global offshore outsourcing market. B. The financial and business services sector, which has Since 1996 Johannesburg has shown positive real GDP always been the cornerstone of the city’s economy, hasgrowth, which has outpaced the national growth rate. become relatively more important. Its economy is growing111 GS Destinations Compendium 2010 www.globalservicesmedia.com

city Profile � Johannesburgfaster than the population growth rate. Johannesburg is Johannesburg is a city in economic transition and it hascreating a substantial number of new jobs in the right sec- grown from a mining town into a financial and manufac-tors. Factors that will improve the distribution of income turing capital, and later into a financial and services capitainclude a steady and strong growth in employment in the and it now faces the toughest challenge of all—becomingright sectors such as permanent formal sector jobs in sec- a knowledge capital. There is a transition underway in thetors that pay above-average salaries and have retirement, economy of Johannesburg, away from low-skilled work,medical and other benefits; and an increase in broad-based and towards high-skill, service-based enterprise—whichBlack Economic Empowerment to increase the owner- requires access to advanced services such as telecommu-ship of wealth. Johannesburg has nications, and high reliability1.5-million economically active of basic services such as electric-people out of a total population Unlike India and Philippines, ity. Johannesburg is the largestof close to 3 million. South Africa has a well- single metropolitan contributor An underconstruction to national economic product.24-hour center coming up in established domestic National average growth in grossJohannesburg will provide outsourcing market. domestic product has been 1.8another 3,000 new jobs. The percent over the last 10 years,new project in Johannesburg will and Johannesburg has marginal-be operational in the ensuing 12 to 14 months, giving the ly outpaced that growth with an average 2 percent growthcountry’s BPO sector the much-needed boost and help it per annum over the last decade.to generate revenues worth over R7.4 B during 2010. The The city’s economy is dominated by four sectors, threeCity of Johannesburg has the highest number of call cent- of which are service sectors. The four key sectors are asers - more than 360- employing some 35,000 call center follows:agents in outsourced and captive (in-house) call centers in • financial and business services;ICT, financial services, banking, tourism, hospitality and • retail and wholesale trade;business-to-business. • community and social services; and The use of wireless technology for data and communi- • manufacturing sector.cations is on the increase. It is cheaper, easier to use andcosts less in infrastructure set up as well as maintenance. All taxation is handled through the South African RevenueFor this Johannesburg needs to offer broad bandwidth in Service (SARS). South African residents have been taxed onconjunction with wireless technologies. It should be noted their worldwide income. This includes the income of a for-that about two-thirds of South African companies use SAP eign-controlled company. Certain types of income fromsoftware. outside South Africa are exempt and credit is allotted for During recession, South Africa’s Johannesburg Stock foreign taxes paid. The tax year is 1st March to 28th (or 29th)Exchange fell by 31 percent last year in mid-November. February. Employees’ tax is deducted at source (pay-as-you-As a result, a lot of investors withdrew their investments. earn) and paid by employers to the authorities monthly. TheSince then South Africa’s currency has depreciated touch- tax thus deducted is a credit against the employee’s total taxing R9/$ for the first time in 6 years. liability as assessed by his or her annual tax return. GS SNAPSHOT➤ Johannesburg produces 16 percent of South Africa’s GDP and accounts for 40 percent of Gauteng’s (one of the nine provinces of South Africa) economic activity.➤ This city has the highest number of call centers - more than 360- employing some 35,000 call center agents in outsourced and captive (in-house) call centers in ICT, financial services, banking, tourism, hospitality and business- to-business.➤ According to DIT (Durban Institute of Technology), ITeS-BPO export is expected to reach $12.4B by 2010 from $11.7B in 2009.➤ During recession, South Africa’s Johannesburg Stock Exchange fell by 31 percent last year in mid-November. As a result, a lot of investors withdrew their investments. Since then South Africa’s currency has depreciated.112 GS Destinations Compendium 2010 www.globalservicesmedia.com

(Source: www.infobengal.com) Kolkata India IT Hub of Eastern IndiaK olkata, formerly known as Calcutta, is the Quick Facts main business, commercial, and financial hub City Kolkata of eastern India. The capital of the state of Region South Asia West Bengal, the city has in recent times been Country Indiatransformed to a major information technology hub in City population 4,580,544 (2001)India. City real estate cost Commercial office space for More and more businesses are setting up office in (US$ per sq. ft) sale: US$ 226.46–US$ 294.39kolkata, including international giants such as IBM, Texas per sq ftInstruments, Cisco Systems, Intel Asia Electronics Inc, Major service providers in the Pricewaterhouse Coopers,Deloitte, Sun Microsystems, Honeywell, PwC, HSBC city IBM, TCS, Cognizant, Skytech,Global Technology, Capgemini, Atos Origin, Foster Lexmark, AIG, and HSBCWheeler, Siemens, Novell, AIG, Skytech, Lexmark, and GDP USD 150 Billion (2009)ABN AMRO Bank. Leading the way in growth have been Primary language spoken Bengalithe kolkata-based companies such as Serenus Infotech, Other languages spoken English, HindiIntelliant Technologies, Alumnus Software, Metalogic Time zone UTC/GMT +5:30 hoursSystems, TCG Software, Data-Core, UshaComm, RS Currency Rupees (INR)Software, among numerous others. Exchange rate 1 USD = 45.3100 INR Other big Indian software firms have already madekolkata their hub of operations for the eastern region living expenses it is one of the world’s major centers ofof India. Of these Wipro, TCS, Tech Mahindra, ITC business in GDP PPP (purchasing power parity) terms.Infotech, HCL Technologies, Cognizant, Genpact, Tata Several IT-SEZ and IT parks have come up in theInteractive Systems, CMC Limited, NIIT Technologies, city, attracting software corporations and foreign directMoser Baer Ltd., Aditya Birla Minacs, and Sonata Software investment in kolkata. kolkata today boasts of 3 Softwareleading the way. Technology Parks (STP), with more coming up. The kolkata, being the dominant metropolitan city of east- 2,50,000 square feet standard design factory with modularern India, has attracted major software and telecom firms Software Technology Park I and the 100 percent export-across India and abroad to set up their development center oriented 60,000 square feet, state-of-the-art Softwarehere. The Eastern Region Council of NASSCOM, the Technology Park II house some key IT players frompremier trade body and the chamber of commerce of the Europe and the Silicon Valley. Privately-owned IT facili-IT-BPO industries in India, is situated in kolkata. ties, like Infinity and Bengal Intelligent Park, have attract- Owing to the recent boom in the economy of kolkata ed big IT companies too.and also the state as a whole, West Bengal is now the third At the operational level, the government has ensuredfastest growing economy in the country and the city’s IT ease of operations in kolkata through Webel (West Bengalsector is growing at a rate of 70 percent per year—twice Electronics Industry Development Corporation), whichthe national average. acts as a single-window support center for all IT inves- In 2009, kolkata’s GDP grew to $150B, the third high- tors in the state. Webel helps companies obtain built-upest among Indian cities. With its huge economy and cheap space on rent/lease and in the purchase of land. It also113 GS Destinations Compendium 2010 www.globalservicesmedia.com

city Profile � Kolkatainteracts with government bodies to help procure last- park,” Buddhadeb Bhattacharjee said.mile connectivity, to get power connections and interacts “Ten thousand high-end jobs will be created inwith the local municipality to reduce the company’s kolkata when the park becomes operational,” said theexposure to bureaucratic problems. Webel has set up an CM. “We are trying to set up more such IT parks atIT “Incubation Center” to properly utilize the huge pool Durgapur, Siliguri, and kharagpur that will generateof human resources and knowledge competencies that the more software jobs for fresh graduates in the state,” addedstate possesses. This center provides a platform for aspiring the chief minister.and talented software and telecom professionals in kolkata West Bengal IT minister, Debesh Das said, “The Parkto float their own IT-start ups. The IT incubation center is a key milestone in the progress of the state’s indus-helps turn viable ideas from talented professionals into trial development especially given that it will lead to thebusiness propositions. creation of 50,000 indirect jobs over and above the 10,000 In October 2010, the chief minister of West Bengal direct ones.”Buddhadeb Bhattacharjee laid the foundation stone of East HCL Infosystems would set up a center of excellencekolkata IT Park at Nonadanga, in the IT Park that would servekolkata, with an aim to attract as the company’s regional head-more IT biggies and gener- quarters. Over 1,500 are expect-ate more employment in West With its huge economy and ed to be employed at the hub.Bengal. cheap living expenses Kolkata Rolta chairman k.k. Singh said, The East kolkata IT Park is one of the world’s major “We are going to set up a soft-will be the fourth such endeav- centers of business in GDP ware research and developmentor of the West Bengal govern- unit here. We will invest Rs 250ment. The earlier ones include PPP terms. crore ($55.02M) and expect toIT hubs at Salt Lake, Rajarhat generate 5,000 jobs.”and Bantala. “Our largest IT West Bengal has been one ofcompanies are in Salt Lake, where 80,000 people work. the fore-runners among Indian states in attracting FDI inAround 10,000 employees are working in the Rajarhat recent years. FDI flow into West Bengal has led to devel-area. Then there is the IT park in Bantala. Now we have opment of infrastructure in the state. The IT companiesone in Nonadanga,” said the CM. in the state have been given special status so that they can Approximately 1 million square feet of space would improve the infrastructure. FDI has also boosted the realbe developed in the East kolkata IT Park. The IT Park is estate industry in West Bengal. Unemployment had beenexpected to be fully operational within 2 years. The park a major area of concern for West Bengal. With the inflowwould have a Regional Skill Development Center and an of FDI, vast opportunities of employment have opened upInfrastructure Management Center, along with network- in this state.ing, hardware, and telecom laboratories to help generate kolkata houses 12 universities and numerous collegesmore employment. affiliated to them. The city is home to many nationally and “Several top IT companies, like Rolta, HSBC Electronics internationally reputed colleges and institutions aimed atData Processing Limited, and HCL Infosystems have supplying a highly-skilled workforce. kolkata also has thealready evinced interest in setting up their facilities in the lowest attrition rates. GS SNAPSHOT➤ kolkata and also the state as a whole, West Bengal is now the third fastest growing economy in the country and the city’s IT sector is growing at a rate of 70 percent per year—twice the national average.➤ In 2009, kolkata’s GDP grew to $150B, the third highest among Indian cities. With its huge economy and cheap living expenses it is one of the world’s major centers of business in GDP PPP (purchasing power parity) terms.➤ In October 2010, the chief minister of West Bengal Buddhadeb Bhattacharjee laid the foundation stone of East kolkata IT Park at Nonadanga, kolkata.➤ HCL Infosystems would set up a center of excellence in the IT Park that would serve as the company’s regional headquarters. Over 1,500 are expected to be employed at the hub.114 GS Destinations Compendium 2010 www.globalservicesmedia.com

Krakow Poland Europe’s “Silicon Valley”K rakow, the second-largest city of Poland, is one Quick Facts of Poland’s most important economic centers. City Krakow krakow is the technology hub for Central Region Central Europe and Eastern Europe. It is sometimes referred Country Polandas Europe’s “Silicon Valley.” The city is the corporate seat City population 755,050 (2008)of international banks, associations supporting business Major service providers in the IBM, Capgemini, HCL, Hewitt,activities, and chambers of commerce. city LogicaCMG, Philip Morris krakow is perceived as an appropriate place to conduct International, AES, Microsoftinvestment and economic activity. key service providers in Primary language spoken Polishthe city are IBM, Capgemini, HCL, Hewitt, LogicaCMG, Other languages spoken English, JapanesePhilip Morris International, AES, Microsoft. In total, Time zone UTC/GMT +1 hourfirms from the outsourcing sector employ 16,000 workers Currency Polish Zloty (PLN)in 50 centers within the city. Outsourcing specialties of Exchange rate 1 US Dollar = 2.87936 Polishkrakow are: business analytics, finance and accounting, Zlotyhuman resources, and multilingual contact centers. Unemployment 2.8 percent (2008) krakow offers attractive business opportunities and theamount of direct foreign investments is constantly increas- zero income tax over the first 6 years and 50 percent reduc-es. The largest foreign investments in krakow are in bank- tion thereafter till 2009. At the same time, investmentsing, industry, and trade sectors, and over the recent years under 2 million Euros warrant income tax exemptionsin IT, financial and telecommunications services. Apart matching expenditures. There are also other incentivesfrom the European companies, there is also considerable such as bigger depreciation write-offs.US investment. The largest investments in krakow and the kTP is the city’s high-tech powerhouse providingregion include those from Affiliated Computer Services, industrial base for krakow’s 15 higher education institu-CapGemini, PwC Polska, IFS Poland, Airline Accounting tions and over 140 research centers. Investments pertain-Center (Lufthansa Group), IBM BTO Business Consulting ing to IT, electronics, communications, software andServices, Hewitt, Centrum Finansowe Tesco, Electrolux, hardware, material engineering, biotech, genetics, etc. areShell, Philip Morris, Exult, kPMG, Google, Motorola, encouraged in the Park.IBM krakow Software Laboratory, Delphi Polska, and The krakow Technology Park consists of 4 separateComArch. areas: the 36-hectare Jagiellonian University Technology kraków Technology Park (kTP) is one of the signifi- Park, the 30-hectare Technology Park of the krakowcant determinants of krakow’s investment attractiveness. University of Technology, the 35-hectare SendzimirkTP was established in 1998 as a special economic Steelworks Technology Park, and the youngest 21-hectarezone covering a total area of 122.35 ha. Main investors Tarnow Industrial Cluster.in the kraków Technology Park are: Motorola Inc., RR krakow metropolitan area is an attractive place as aDonnelley, AMS, ComArch SA, AZ-Soft SA, Alcro- labor market with approximately 1.5 million residents.Beckers AB, ABM SOLID SA. Entrepreneurs investing Highly motivated people with excellent qualifications arein the kTP can avail of income tax exemptions. Capital on the job market and are ready to work immediately. Theexpenditures above 2 million Euros ($2.6M) used to entail employment costs are lower in krakow than elsewhere (for115 GS Destinations Compendium 2010 www.globalservicesmedia.com

city Profile � Krakowexample, 30percent less than in Warsaw). Compared to the firms. Google, IBM, Motorola, ABB, SABRE, Delphi,other parts of the country krakow has many advantages fujitsu all have R&D centers in the city.for businesses wanting to locate here, like high availability There’s a lot of offshore BPo from CapGemini,of IT specialists and executive staff, high productivity at IBM, Motorola, Shell, ACS, Fortis Bank, UBS, Comarch,low labor costs and flexibility and excellence, advanced Unicredito Bank, Tesco, International Paper, HSBC,foreign language competence, friendly environment for Lufthansa, StateStreet, HCL, Philip Morris, Hewitt,science and research and strong business connections. Alexander Mann, Hitachi, Accounting Plaza, EDF Energy, Another advantage of krakow is its convenient geo- UPM-kymenne, etc.graphic location, on the crossroads of important transporta- IBM is one of several large corporations massivelytion routes. Transportation accessibility of the city is being building its presence in the city. Since 2002, IBM hasconstantly improved by the executed infrastructural invest- boosted staff in krakow ten-fold, to more than 900 people,ments. Convenient train connections with Warsaw and at a facility that provides finance and accounting servicesother major cities and an international airport with numer- to business customers. Another 200 people work at anous domestic, European, and Pan-European connections are IBM software lab founded in 2005.all very significant to the efficient conducting of business. Many European IT companies outsource their software The intellectual potential of krakow is created by 22 development to Poland because no communication, cul-universities, nearly 20,000 academic lecturers (includ- tural, territorial, or quality issues occur there. Most Polishing approximately 1,800 pro- companies are much closer thanfessors), and 210,000 students their Asian counterparts—geo-in higher education, more than Krakow has many advantages graphically, culturally, and in the30,000 new graduates a year, for businesses wanting to way they do business. Poland is8,000 IT sciences students, and only an hour ahead of the Uk,5,000 mechanical engineers. locate, like high availability of so communication is quicker,Major universities of krakow are IT specialists and executive simpler, and more reliable thanAGH University of Science & staff, high productivity at low it is with a country in anotherTechnology, Cracow University labor costs and flexibility and time zone. Wages are significant-of Technology. There are 8 uni- ly lower in Poland than in theversities in Krakow with It excellence, advanced foreign Uk and Western Europe. Anddegrees. krakow has a plentiful language competence,etc. Polish IT professionals have verygroup of highly skilled person- strong academic backgroundnel in all modern sectors of the which guarantees the highesteconomy, and it attracts investors that represent various level of IT developers’ education.industries. The unemployment rate in krakow ranks A further advantage is that Poland is now a well-estab-among the lowest in Poland and it had slipped below 3 lished member of the Eu, meaning there are no legalpercent in 2008. obstacles to cooperate with Polish IT companies both “We chose krakow because of the multiplicity of tal- remotely and on site. GSents and resourcefulness of knowledge, which the city canoffer,”kristof kloeckner, vice-president of IBM SoftwareGroup was quoted as saying. “We see an objective in opening similar centers inplaces where there is an opportunity to employ top spe-cialists in their fields. krakow is such a location,” ArturWaliszewski, Director of Google Polska, was quoted assaying about the opening of the research and developmentcenter in krakow. The economic significance of krakow is reinforced bythe demographic potential of the region—approximately 8million people live within a 100 km radius of the city. Thisconstitutes an accessible potential market. An additionaladvantage is the fact that 60percent of the inhabitants ofthe city are people under age 45. krakow is emerging as a key R&D center for many US116 GS Destinations Compendium 2010 www.globalservicesmedia.com

KL’s symbol, the Petronas Twin Towers (Source: wikitravel) Kuala Lumpur Malaysia The Gateway to the ASEAN MarketT he Malaysian business process outsourcing Quick Facts (BPO) industry would be worth roughly US$ 2 City Kuala Lumpur Billion by the year 2012 at current pace. kuala Region Southeast Asia Lumpur and its surrounding urban areas form Country Malaysiathe most industrialized and economically, the fastest grow- City Population 1,809,699 (2009)ing region in Malaysia. City Average Monthly Entry Level US$800–1,000 kuala Lumpur is the capital and second-largest city of Salary (in US$) per month (BPO)Malaysia in terms of population. Malaysia’s strong talent City Average Monthly Entry Level US$1,200–1,600pool and advantages have placed it among the top three Salary (in US$) per month (ITO)Shared Services Outsourcing (SSO) destinations in the City Real-Estate Cost RM720 per square feetworld. kuala Lumpur is an ethnically diverse city with Major Service Providers in the IBM, Oracle Corporation,a well-educated, multicultural, multilingual population. City Ericsson, Samsung, DiGi, Intel,Even if the official language is Bahasa Malay, most people Hewlett Packard, accenture,speak good English. Malaysia’s outsourcing and shared Nokia, etc.services (SSO) industry is likely to undergo a consolida- Primary Language Spoken Bahasa Malaysiation of sorts as it seeks to reinvent itself in the face of stiff Other Languages Spoken Cantonese, Mandarin,competition in the global market. and Tamil. English The city remains the economic and business center of Literacy Rate 97.5 percentthe country. kuala Lumpur is a center for finance, insur- GDP Kuala Lumpur along with otherance, real estate, media, and the arts of Malaysia. kuala cities contributed 62.7 percent to the national GDPLumpur is rated as an alpha world city, and is the onlyglobal city in Malaysia, according to the Globalization and Time Zone MST (UTC+8)World Cities Study Group and Network (GaWC). Currency Malaysian ringgit (RM) $1= 3.1 MYR The total current employment in kuala Lumpur is Unemployment 2.8 percentestimated at around 838,400. The tertiary or servicesector forms the largest component of employment inkuala Lumpur, representing about 83 percent of the total corporations, kuala Lumpur is a highly competitive manu-compared to 71 percent in the kLC (entire klang Valley facturing and export base. The 2011 budget has beenRegion, also known as Greater kuala Lumpur or kuala announced against the backdrop of a robust growth of 7Lumpur Metropolitan Area). The tertiary sector comprises percent expected for this year from 6 percent forecast ear-finance, insurance, real estate & business services, whole- lier and set to expand by 5-6 percent next year, buttressedsale & retail trade, restaurant and hotel, transport, storage by a superlative showing of the ringgit regionally.and communication, utilities, personal services, and gov- Incentives have been given to boost the capital mar-ernment services. ket through issuance of three new stockbroking licenses Being strategically positioned as the gateway into the to eligible local, foreign, or joint-venture companies toASEAN market and having market-oriented economy, raise retail market participation. As for the East Coastsupportive government policies, and a large local business Economic Region (ECER), RM178 million ($57.3M) hascommunity that is ready to do business with international been allocated to develop industrial parks and other areas.117 GS Destinations Compendium 2010 www.globalservicesmedia.com

city Profile � Kuala lumpurThe Gross Domestic Product (GDP) for kuala Lumpur is projects in the IT field and provides incentives and grantsestimated at RM73,536 million ($23.7B) in 2008 with an for relevant projects.average annual growth rate of 5.9 percent. The per capita Insofar as kuala Lumpur is the capital of the nation, itsGDP for kuala Lumpur in 2008 was RM48,556 ($15,650) economic catchments encompass the entire country. Thewith an average annual growth rate of 5.9 percent. present range of human activities in the city, its infrastruc- The city has a large number of foreign corporations and ture and buildings, its parks and monuments, its spectrumis also host to many multinational companies’ regional of social, spiritual, recreational and entertainment facili-offices or support centers, particularly for finance and ties, and its concentration of governmental and non-accounting, and information governmental institutions aretechnology functions. Moreover, manifestations of the city’s func-most of the countries’ largest Malaysia’s outsourcing and tion as the capital of the nation.companies have their headquar- shared services (SSO) industry With the relocation of federalters based here. government administrative func- Other important economic is likely to undergo a consoli- tions to Putrajaya, some diminu-activities in the city are educa- dation of sorts as it seeks to tion of this role is likely to betion and health services. kuala reinvent itself in the face of felt, but the city will remain theLumpur also has advantagesstemming from the high concen- stiff competition in the global economic and business center of the country. This is due to thetration of educational institu- market. fact that kuala Lumpur and itstions located within its bounda- conurbation (kLC) form aries, providing a wide range of region that is the most industri-courses. There has been growing emphasis to expand the alized and economically the fastest growing in the country.economic scope of the city into other service activities such Furthermore, the development of the kuala Lumpuras research and development that supports the rest of the International Airport at Sepang, the creation of the MSC,economy of Malaysia. The tourism sector also plays an which includes Putrajaya and Cyberjaya, and the expan-important part in the city’s economy, providing income, sion of Port klang have reinforced the national and inter-employment and expanding business opportunities. As national economic significance of the city. As an interna-an extension of this, many large worldwide hotel chains tional business center, kuala Lumpur vies with cities suchhave presence in the city. kuala Lumpur is the fifth most as Singapore, Bangkok, Manila and Hong kong for pri-visited city in the world, with 8.94 million tourist arrivals mary position in the Asia Pacific Region. In realizing itsin 2008. vision to become A World-Class City, kuala Lumpur must Multimedia Super Corridor, Malaysia (MSC) is an address the regional, national and international perspec-important component of the Malaysian e-strategy. It is tives, embrace the opportunities presented and define itsa dedicated 15 x 50 km corridor outside kuala Lumpur specific role. GSthat aims to attract global ICT companies to undertakeresearch, develop new products and technologies, andexport from this base. Conceptualized in 1996, theMSC is envisioned to become a global test bed for ICTapplications. It is also intended to be the ideal growthenvironment for Malaysian ICT small and mediumenterprises (SMEs) seeking to transform themselves intoworld-class companies. To attract the targeted companies,the Malaysian government has committed to the followingfour promises: a Bill of Guarantees, world-class infrastruc-ture, a suite of cyber laws, and incentives. Some of the notable companies based in kuala Lumpurare IBM, Oracle Corporation, Ericsson, Samsung, DiGi,Intel, Hewlett Packard, Accenture, Nokia, etc.. kuala Lumpur is a very attractive place for foreigninvestment due to its high infrastructure and humancapital standards, as well as the robustness of its internalmarket. The city welcomes investments and productive118 GS Destinations Compendium 2010 www.globalservicesmedia.com

(Source: media.photobucket.com) Mexico City Mexico BPO Boom Causing Ripple Effect Throughout Mexican IT IndustryM exico City is the capital and largest city of Quick Facts Mexico. known for being the most populat- City Mexico City ed Spanish-speaking country in the world, Region Central America Mexico boasts of a free market economy. It Country Americais the world’s 12th largest economy and has the highest per City Population 112,468,855 (July 2010 est.)capita income within Latin America. City Real-Estate Cost US$5.31 per square feet (Class A) and The recent boom in business process outsourcing US$4.79 per square feet (Class B)(BPO) is not only creating much-needed jobs, but is also Major Service Providers in Tata Consulting, MindTree, NoShorehaving a ripple effect throughout Mexico’s IT industry. the City Group, Indra, Genpact, Neoris,Mexican IT firms are suddenly flexing their muscle on a Softtek, ACSglobal stage. Primary Language Spoken Spanish (92.7percent) Mexico has enviable human capital with respect to Other Languages Spoken Spanish and indigenous languagesBPO services such as contact center. Moreover, there (5.7 percent), indigenous (0.8is active support from the Mexican government. Huge percent), unspecified (0.8 percent)government incentives to set up contact centers may Literacy Rate 91.4 percent (2009)touch all the right buttons with the contact center GDP $1.465 Trillion (2009 est.)outsourcers companies and in-house shared services Time Zone CST (UTC-6)organizations. Currency Mexican Pesos (MXN) As an “alpha” global city, Mexico City is one of the $1 = 12.26 MXNmost important financial centers in North America that Unemployment 5.5 percent (2009)is located in the Valley of Mexico. Mexico’s GDP plunged6.5 percent in 2009 as world demand for exports droppedand asset prices tumbled. However, with Mexico’s econo- have more limited tax powers and are not authorizedmy and GDP per capita both growing at high rates now, in to levy general corporate income taxes. The federal cor-which Mexico City’s GDP is set to at least double within porate income tax rate is 35 percent. There are no statethe 2010–2020 decade according to numerous economic taxes on corporate net income. A value-added tax (VAT)reports. at the general rate of 10 percent is payable on sales of Mexico’s trade regime is among the most open in the goods and rendering of services, rents, and imports ofworld, with free trade agreements with over 50 coun- goods and services.tries, including the United States, Canada and the EU. Some of the notable companies based in Mexico CityMexico City is responsible for generating 21 percent of are Tata Consulting, MindTree, NoShore Group, Indra,Mexico’s Gross Domestic Product, and the metropoli- Genpact, Neoris, Softtek, ACS.tan area accounts for 34 percent of total national GDP. Mexico City is a very attractive place for foreign invest-Government officials expect the economy to grow 4–5 ment due to its high infrastructure and human capitalpercent in 2010. The principal taxes payable by individu- standards, as well as the robustness of its internal market.als and by corporations operating in Mexico and, in cer- The city welcomes investments and productive projects intain cases, by foreign companies, are those levied by the the IT field and provides incentives and grants for relevantfederal government. State and municipal governments projects. GS119 GS Destinations Compendium 2010 www.globalservicesmedia.com

(Source: media.photobucket.com) Prague Czech Republic The IT Capital of Central Europe P rague is indisputably becoming the capital of Quick Facts Central Europe. Many large companies have City Prague their regional headquarters here and the city Region Eastern Europe is an enticing investment location, despite Country Czech Republic being more wealthy (and therefore expensive) than many City population 1,212,097 (2007) Western counterparts. Major service providers in the Accenture, Cap Gemini, Siemens, Prague is the capital of Czech Republic (CR). Prague city Honeywell, Sun Microsystems. has a strategic location in Europe; it’s centrally located and Primary language spoken Czech has easy transport links. Prague is often considered the Literacy rate 99 percent heart of Europe. GDP per capita (recalculated - in € 42,800 (PPS) (2007) The capital city of Prague is the largest city of the Czech purchasing power standards) Republic. Its area is 496 sq km, which is only 0.6 percent Time zone UTC/GMT +1 hour of the CR’s territory, but with the population of 1,212,097 Currency Czech Koruna (CZK) inhabitants (2007) it represents 11.7 percent of the total Exchange rate 1 USD = 18.1970375 Czech population of the CR. Prague then markedly dominates Koruna the population structure in the Czech Republic. Prague has a well-developed transport and telecommunications infra- making up about 18 percent of the workforce, up from structure. It has a highly skilled and educated workforce. 131,132 in 2008. Approximately one-fifth of all invest- Much of the working population is qualified to degree ment in the Czech Republic takes place in Prague city. level or higher. Prague’s economy accounts for 25 percent of the Prague ranks among important and developed regions Czech Republic’s GDP making it the highest performing even within the entire EU. After the 1990s a very fast regional economy of the country. According to Eurostat transformation in a wide range of socio-economic areas (statistical office of the European Union), in 2007, its has taken place in Prague. The city has become an attrac- GDP per capita in purchasing power standard was 42,800 tive territory for investors especially among foreign eco- € ($58,380). Prague was ranked the fifth best-performing nomic entities, for whom it is a mark of good reputation European NUTS 2 level region at 172 percent of the to acquire residencies within Prague. EU-27 average. There has been a substantial improvement in the quality The city boasts skilled IT workforces and centers of of connection of Prague to European and the worldwide excellence set up by major multinational corporations such communication network. There is a stable and manifold as Accenture and Cap Gemini. labor market and potential of labor force with above Extraordinary advance of Prague in economic perform- average qualification. Quality background of educational, ance per capita is due to several key factors, namely, high scientific, and research institutions plays an important role rate of commuting to work (in 2008 amounted to 18.5 too. percent of all employees in Prague), the concentration of There are 800,000 employees in Prague. The number gross value added generated by the government sector, of foreign residents in Prague has been increasing in spite the concentration of most of the services sector (banking, of the country’s economic downturn. As of March 2010, insurance, telecommunications), a higher price level which there were 148,035 foreign workers living in the city is not reflected in the regionally different conversions of 120 GS Destinations Compendium 2010 www.globalservicesmedia.com

city Profile � PragueGDP at purchasing power parity and high compensations mounting crime, bad environment, overloaded transport,of employees. and increased costs of living for the population. Accenture’s Europe Business Process Outsourcing Prague is still a little cheaper than most EuropeanDelivery Center in Prague was established in 2001. capital cities for essentials such as food and transport. ButCurrently, the Prague Center employs more than 1,500 for luxury goods like electrical appliances, cosmetics andaccounting, HR, and administration professionals and fashion, prices are higher here than elsewhere.plans call for expanding the facility in phases. Some In 2008 inflows of foreign direct investment in Czechwell-known multinational companies have established Republic were roughly $10.73B. By U.S. Embassy esti-research and development facilities in Prague, among them mates, the United States is among the top 5 investors inSiemens, Honeywell, or Sun Microsystems. the Czech Republic. FDI have contributed significantly In October 2010, Cisco announced the opening of its to the CR’s economy’s strength. The stock of FDI in thePrague Center of Excellence, which uses the latest technol- country amounts to around 50 percent of GDP.ogy in providing sales and partner coverage to 27 countries Despite broadly favorable economic performance, long-in Central and Eastern Europe and the Commonwealth term unemployment remains high. Thus, the Czechof Independent States (CIS). Republic must continue toThe center is serving some 350 address the structural problemspartners and 2,500 custom- in the labor market.ers in 27 countries. According Prague is an enticing invest- Important remaining issuesto Alexander Winkler, general ment location, despite being that still need to be addressedmanager, Cisco Czech Republic, more wealthy (and therefore include: restoring the long-term“Cisco is investing in the Czech more expensive) than many sustainability of public financeRepublic as part of our long-term through reforms in health andcommitment to the country. We Western counterparts. pension systems; improving thehave been present in the Czech functioning of the labor marketmarket since 1995, and over the to increase labor mobility; andpast 15 years have established several regional functions in continually improving the business environment.Prague. We have chosen the Czech Republic, and in partic- According to the medium-term state budget for 2012ular Prague, for the Center of Excellence activity due to the and 2013 of the Czech government, the Czech economyavailability of educated talent, excellent communications could grow by almost 4 percent in 2013. In 2009 theinfrastructure, and the fact that it is an attractive location Czech economy fell by 4.1 percent and the average year-for team members, both local and international.” on-year inflation was 1 percent. Unemployment calcu- Prague has a lower unemployment rate than the rest of lated by the International Labour Organisation (ILO) wasthe country. Even though jobs have declined in the manu- 6.7percent on average in 2009.facturing sector, Prague still holds the largest industrial For 2010, the Finance Ministry expects the economy tocenter in the Czech Republic. expand by 1.6 percent. The year 2010’s growth should However, what cannot be forgotten are weaknesses: mainly be pulled by foreign trade. GS SNAPSHOT➤ Approximately one-fifth of all investment in the Czech Republic takes place in Prague city.➤ Prague’s economy accounts for 25 percent of the Czech Republic’s GDP making it the highest performing regional economy of the country.➤ In October 2010, Cisco announced the opening of its Prague Center of Excellence, which uses the latest technology in providing sales and partner coverage to 27 countries in Central and Eastern Europe and the Commonwealth of Independent States (CIS). (Source: www.gumbopages.com)➤ According to the medium-term state budget for 2012 and 2013 of the Czech government, the Czech economy could grow by almost 4 percent in 2013.121 GS Destinations Compendium 2010 www.globalservicesmedia.com

Rio de Janeiro BrazilAttractive for High-value ServicesB razil has Rio de Janeiro—this seems to be one Quick Facts of the important selling points for outsourcing City Rio de Janeiro to the country. Region South America The political situation in Rio is favorable Country Brazilfor outsourcing. The services sector constitutes the promi- City Population 14,392,106nent portion of GDP (65.52percent). Especially after City Average Monthly Entry Level $330–$360the discovery of oil in the Campos Basin, Rio has been Salary (in US$) per month (BPO)pulling in more companies and investments. Rio stands City Average Monthly Entry Level $420–$440second nationally in the financial and services sector. Rio Salary (in US$) per month (ITO)de Janeiro has 8 out of 10 of the country’s top science and City Real-Estate Cost $500 per square foottechnology schools; it produces a large number of post- Major Service Providers in the Telemar, BR Distribuidora,graduates and PhDs every year. This enhances Rio’s attrac- City Embratel, etc.tiveness for high-value services. It has expertise in BPO Primary Language Spoken Brazilian Portugueseand call centers; there are science and technology business Other Languages Spoken English, French, Spanish, andparks; there are government financing, R&D credits, etc. Russian The state has internationally recognized research cent- Literacy Rate 90 percenters, which form highly skilled technicians. The Fund for GDP US$ 46.9 BillionSocial and Economic Development (Fundes) is aimed at Time Zone BST (UTC-3)funding working capital for new businesses or expansion Currency Reais (BRL)of enterprises already installed. Rio’s economy boasts of a $1 = 1.71 BRLrespectable number of IT professionals and highly quali- Unemployment 9.5 percentfied workforce. A new employment and income generation plan is therecent approval of the bill establishing the Ecological and professionals are the major strengths of Rio. The averageEconomic Zoning (EEZ) in Rio de Janeiro. The presence price of commercial rent in Rio is around one-third of theof a large number of universities and research centers of price in Mumbai and Moscow. key service providers oper-excellence and a basic infrastructure (major telecommuni- ating in Rio are Telemar, Petrobras, AES Communications,cations hub in the country) makes the capital a major pole Light, Furnas, InfiNet Wireless, Comtex, DBA Engenhariaof Information Technology. Brazilian currency in recent de Sistemas Limited, etc.years has become a stable currency, and is strong against As regards call center and eBPO services, Rio is thethe US dollar and the Euro. headquarters of three of the six largest telecom companies Chinese companies have been investing in Brazil by in Brazil. It should be important to note that applicationbuilding telecommunications and infrastructure projects. development and maintenance is the specialty of BrazilianChina continues to fuel Brazil’s economic growth. The IT programmers. The main outsourcing center in Brazil,economic slowdown seems to have brought the two coun- other than Rio de Janerio, is Sao Paulo. The National ITtries closer together. organization is the Sociedade de Usuários de Informática Time zone, U.S. like culture, and an expanding e Telecomunicações.software industry with a more than ample supply of IT Brazil is the largest economy in South America and is122 GS Destinations Compendium 2010 www.globalservicesmedia.com

city Profile � rio de Janeirofast emerging as a prominent player in the services globali- companies has been part of the country’s economy forzation arena, on account of its huge technical talent pool decades. As a result, the country has a strong IT laborand nearshore advantage. Brazil has accomplished excel- pool with deep industry specific expertise. Revenue comeslence in applications management, infrastructure managed mainly from IT services, with 73 percent related toservices, and security technology development along with development, a higher proportion than in other coun-multilingual BPO capabilities. tries. The Brazilian government has its aim set to become Rio de Janeiro has the second-largest GDP in Brazil, one of the three key global IT centers in the world. Itsbehind São Paulo and is the 30th goal- to increase IT-BPO exportsrichest city in the world with a from $2.2B in 2008 to $3.5B byGDP of $152B. Time zone, U.S. like culture, 2010- is close to being achieved. It has a comparatively smaller To help drive development theypool of educated English speak- and an expanding software have implemented numerousers than India or Canada. The industry with a more than initiatives, including favora-2016 Olympic Games are com- ample supply of IT profession- ble tax reductions, governmenting to Rio de Janeiro and is als are the major strengths sponsored venture capital fundsexpected to generate about $40B and IT education support.of investments. Rio is also one of of Rio. As of 2014, there will bethe host cities of the 2014 FIFA about $200M worth of tax gen-World Cup. eration in Rio. The expected As per Brasscom, IT-BPO sector in Brazil comprises investment in the city by 2010–2012 is $91B. Due to theabout 7 percent of Brazil’s GDP and it is still growing at a upcoming international sporting events to be held in thegood pace. After more than four decades of development, city, besides investments from the private sector, there willBrazil has grown to become the eighth largest market in be significant improvements in security. All this demon-the world. Growth forecasts for the IT-BPO segment have strates that there will be a great future ahead for the city inremained high despite the global economic crisis, turning terms of professional growth and economic develop-over $v59.1B in 2008. Large Brazilian and multinational ment. GS SNAPSHOT➤ Rio de Janeiro has the second-largest GDP in Brazil and is the 30th richest city in the world with a GDP of $152B.➤ Rio stands second nationally in the financial and services sector.➤ The Brazilian government aims to become one of the three key global IT centers in the world. Its goal- to increase IT-BPO exports from $2.2B in 2008 to $3.5B by 2010- is close to being achieved.➤ As of 2014, there will be about $200M worth of tax generation in Rio. The expected investment in the city by 2010–2012 is $91B.123 GS Destinations Compendium 2010 www.globalservicesmedia.com

San Jose Costa RicaBridging the US and Latin AmericaS an Jose is Costa Rica’s capital and the larg- San Jose – Quick Facts est metropolitan city. It is the seat of national City San Jose government, the focal point of political and Region Central America economic activity, and the major transporta- Country Costa Rication hub of Costa Rica. The population of San Jose is City population 346,000346,000. Major service providers in the Intel, Hewlett-Packard, ArtinSof The majority of the IT activity and free trade zones in cityCosta Rica takes place in the San Jose metropolitan area Primary language spoken Englishand the adjacent cities located in the provinces of Cartago, Other languages spoken Spanish, Vietnamese, Chinese,Heredia, and Alajuela. and Tagalog San José has been able to attract FDI in IT-enabled Time zone UTC/GMT -6 hoursservices because of the country’s location; the legacy of Currency Costa Rican Colon (CRC)past investments in human capital and infrastructure, a Exchange rate 1 US Dollar = 520.253 Costastable political system, attractive tax and tariff conditions Rican Colonin the Free Zones (FZs) combined with pro-active foreigninvestment promotion through CINDE (foreign invest- among the cities of the Americas; the cost of goods andment promotion agency). services is among the lowest in the world. San Jose’s cost San Jose has a strategic location, as a bridge between the of living ranks close to the middle when compared to 118United States and Latin America, as well as the Atlantic cities worldwide. The cost of living in Guatemala Cityand the Pacific. Proximity to the United States reduces the or Pamama City is about 14 percent higher than in Sandelivery time for goods exported to the United States, and José.it is a strategic asset for near-shoring of IT-enabled services, In 2009, 29 foreign companies entered or enhancedespecially given similar time zones. operations in the country, accounting for more than San Jose is known for its labor force, its business envi- $304 Million in investment and creating 5,729 jobs,ronment and the lifestyle it offers resident executives and according to the CINDE.investors. The city’s strategic location, political stability, Costa Rica is the safest place in Central and Southand business incentives, have all contributed to millions of America for multinational companies to conduct business.dollars in investment from multinational companies such Foreign investors remain attracted by Costa Rica’s politicalas Intel, Hewlett-Packard, and ArtinSof. stability and high education levels. Costa Rica’s major eco- Intel has the most significant technology park in San nomic resources are its fertile land and frequent rainfall, itsJosé. Intel’s decision to build a microchip assembly and well-educated population, and its location in the Centraltesting facility in San José played a huge role in the mag- American isthmus, which provides easy access to Northnitude and nature of foreign investment flows to Costa and South American markets and direct ocean access to theRica, as it put the country on the map for transnational European and Asian continents.corporations in the high-tech sector. After experiencing positive growth over the previous San José is among the least expensive cost-of -living several years, the Costa Rican economy shrank slightly incities in the world and second only to Quito, Ecuador 2009 (-2.5 percent) due to the global economic crisis. Thein the Americas. San José’s prices are the second lowest economy has experienced a rebound in 2010 with a 3.6124 GS Destinations Compendium 2010 www.globalservicesmedia.com

city Profile � San Josepercent GDP growth rate. Costa Rica enjoys the region’s Rica, Foreign Trade Promotion Office (PROCOMER) ofhighest standard of living, with a per capita income of the country organized the “Costa Rica Investment World,”about U.S. $10,569 (2010 est., PPP), and an unemploy- an international investment promotion fair, in April 2010ment rate of 6.7 percent. in San Jose. The event attracted more than 105 foreign According to AACCLA (Association of American investors and provided networking and education throughChambers of Commerce in Latin America), Costa Rica’s a series of panels focused on Costa Rica’s investment envi-labor force has been rated as the most productive and ronment and target sectors.fast learning in Latin America. Costa Rica’s workforce is Despite its many advantages, Costa Rica is not a perfectalso extremely well trained and IT-proficient. Education sourcing destination. One criticism is that its workforceis mandatory and free until (2.1 million) is too small for thethe ninth grade, and strongly multinational IT and BPO mar-emphasizes computer and tech- Intel’s decision to build a ket it’s targeting. San Jose with anology skills. The result is that population of 346,000 is theCosta Rica has one of the high- microchip assembly and testing only city in Costa Rica that canest literacy rates in the American facility in San José played a support a decent-sized outsourc-continent (95.8 percent), and is huge role in the magnitude and ing operation, as compared toa great value proposition for IT nature of foreign investment other cities none of which haveoutsourcing firms. A considera- populations over 70,000. “It’s able number of people have some flows to Costa Rica small country and that doesn’tknowledge of English, a result work well for a growing compa-of the introduction of foreign ny,” Mario Chaves, CEO oflanguage instruction in primary schools in 1994 and the Avantica Technologies, an IT services provider, was quotedprevalence of English-speaking tourists. as saying “We didn’t want to rely on our ability to grow Costa Rica also provides stability- economic, political only in Costa Rica, so we looked at outside locations.” Hisand with respect to capital-labor relations, again mostly company Avantica currently has around 200 employees.due to the social democratic model and strong institutions He’s looking to hire another 200, which he admits is dif-developed in the past. Costa Rica’s main universities are ficult in Costa Rica. “Not that it can’t be done. Intel’sthe University of Costa Rica, in San Jose and the National operation has around 4,000 workers in Costa Rica, HP hasUniversity of Costa Rica, in Heredia. Costa Rica also has 6,500 and Procter & Gamble has 1,350 – but you needseveral private universities. those kind of hefty resources to attract that talent,” he had To attract more foreign companies to invest in Costa said. GS 27 January, New York “Other outsourcing conferences do not have a good mix of Buyers and Sellers. Most of the time it is lot of sellers. So I think, it’s a good mix, you get to hear from the buyers prospective which is very important” . -Global Services Conference 2010 Attendee Know More125 GS Destinations Compendium 2010 www.globalservicesmedia.com

São PauloThe “Brazilian locomotive”S ão Paulo is Brazil’s bustling economic and São Paulo – Quick Facts financial center. São Paulo has a metropolitan City São Paulo population of about 20,500,000 (2009 est.). It Region South America is the world’s third-largest city and the largest Country Brazilin South America. This city is also the most prosperous City population 20 million (2009)in Brazil, with the highest per capita income and overall Cost of renting office space $100 per sq ftstandard of living. (Annual rent) São Paulo has evolved from a small village into one of Average programmer’s salary R$ 1,000–R$1,800the world’s top cities. Its proximity to the United States (in BRL)makes it distinctly more accessible than more distant Asian Graduate’s salary (in BRL) R$2,500–R$4,000locations. São Paulo, therefore, qualifies as a “near-shore” Major service providers in the HP, Accenture, Unisys, TCS, EDS,location for the US market, along with Canada and vari- city Deloitte, Motorola, Intel, Nortelous Caribbean countries. Networks, TIBCO, Stefanini IT São Paulo is Brazil’s most important business center. Solutions, KaseyaWith the country’s best infrastructure and a highly skilled Primary language spoken Portugueselabor force, it can be called the “Brazilian locomotive,” Other languages spoken Japanese, Spanish, Koreanthat drives the national economy. Almost every major Time zone UTC/GMT -3 hoursindustry in Brazil is based there, and 15 percent of Brazil’s Currency Brazilian Real (BRL)gross national product is generated in here. The city cur- Exchange rate 1 USD = 1.71996 Brazilian Realrently has almost 60 percent of call center positions in the Unemployment 15.5 percentcountry. São Paulo with its ideal location and growing economy highest concentrations of software university graduates inhas become a big draw for many foreign investors. The Latin America.Economic Commission for Latin America (ECLAC) says Brazil—with its 250,000 IT professionals, 23,000Brazil is the top recipient of FDI in Latin America. annual IT graduates, and infrastructure capable of sup- In November 2010, Capgemini, one of the world’s fore- porting double-digit growth—is at the heart of the ITmost providers of consulting, technology and outsourcing services supply chain in the Southern Hemisphere.services, announced that it is growing its BPO footprint in In fact, most major U.S. players including HP,Latin America with the expansion of its delivery centers in Accenture, and Unisys have an escalating presence inthe Campinas region of São Paulo. Brazil, which has been largely unaffected by the recent glo- São Paulo has the greatest number of higher education bal economic slump. In June 2010, IBM announced plansand research institutions in the country. The city has 3 for its first South American research center in Brazil, asstate and 3 federal universities, aside from a number of part of its strategy to sell technology and services to large,private institutions. As a result, São Paulo features a great fast-growing emerging nations.number of skilled and highly qualified professionals capa- Indian outsourcers such as Satyam, Infosys and Wiproble of developing the most complex applications. The city’s have been aggressively expanding in Latin America. Tatasolid technological base also enables professionals to deal Consultancy Services (TCS), for example, has 3 globalwith technological innovations. São Paulo has one of the delivery centers, including an Oracle center of excellence126 GS Destinations Compendium 2010 www.globalservicesmedia.com

city Profile � São Pauloand more than 1,500 employees working in Brazil. EDS, are companies that are stopping exports because they areDeloitte, Motorola, Intel, Nortel Networks, TIBCO, unable to find skilled labor,” says Rafael Moreira, fromStefanini IT Solutions, kaseya, Politec, and Nokia have the Ministry of Development, Industry and Overseasoffshore centers in São Paulo. Commerce (MDIC). Intel’s Latin American headquarters, Intel Brazil, is The country’s objective is to increase its income six-foldlocated in São Paulo and is primarily focused on sales and from software exports and tech services that amounted tomarketing. The Intel office in São Paulo is the largest Intel $3B in 2009. That means an increase in the IT contribu-sales office in Latin America. tion to national GDP from 3.5 percent in 2010 to 5.3 According to the Brazilian Association of Information percent.Technology and Communication Companies In 2008, IT-BPO market of Brazil turned over $59.1B,(BRASSCOM) Brazil’s offshore outsourcing market hit including exports and in-house IT. Brazil’s IT-BPO sector$1.4B in 2008, rising 75 per- is among the strongest and mostcent in a single year. Brazil’s mature in the world. Combinedrecognition as one of the most In November 2010, Capgemini with the communications sectorpromising and rapidly emerging it accounts for about 7 percenteconomies makes it a natural announced that it is growing its of Brazil’s GDP. Large Braziliandestination to evaluate for IT BPO footprint in Latin America and multinational companiesservices. with the expansion of its deliv- have been part of the country’s By 2020 Brazil hopes to be ery centers in the Campinas economy for decades. As a resultone of the world’s top 4 in off- the country has a strong IT laborshore IT, turning over $20B. But region of São Paulo. pool with deep industry spe-to achieve that goal the country cific know-how. Revenue comeswill need to overcome a number 27 January, New York mainly from IT services, with 73of challenges—one of which is to train 300,000 IT special- percent related to development, a higher proportion thanists in the next 10 years to reduce the cost of labor. in other countries. High rate of student dropouts from IT graduate courses The Brazilian government aim to increase IT-BPOand “Other outsourcing conferences do not have a good mix ofin 2008 to $3.5B by 2010 is close high taxes are other barriers. There is an imbalance exports from $2.2B Buyers and Sellers.between supply andtime it is The of sellers. So I think, it’s a good mix, you get to hear from have Most of the demand. lot professional graduate to being achieved. To help drive development theydoes the buyers prospective which is very important” . not meet company demands, because he enters the implemented numerous initiatives, including: favorablework market unprepared. “We need to produce profes- tax reductions, government-sponsored venture capital -Global Services Conference 2010 Attendeesionals on a large scale and quickly with a curriculum funds, and IT education support. Know Morethat meets company needs. Today firms are in great need Brazil’s economy boomed at a 9 percent annual rateof programmers costing less. As they are unable to find in the first quarter of 2010, its fastest pace in at least 14them they hire specialized graduates, which in turn drives years. Economists now see Brazil’s gross domestic productup labor costs. An average programmer earns between R$ expanding more than 7 percent this year, putting it among1,000 ($576.5) and R$1,800 ($1037.5) while a graduate the fastest-growing in the world.earns between R$2,500 ($1,441) and R$4,000 ($2,305.6). With brisk growth and considerable natural resources,Training capacity is a large bottleneck of Brazil. There the country is becoming a global heavyweight. GS 27 January, New York “Phenomenal & an Excellent platform to meet lot of clients and other people from same industry. Good exchange of thoughts and ideas. I would definitely come back year after year and would highly recommend people out there to come and participate” . -Global Services Conference 2010 Attendee Know More127 GS Destinations Compendium 2010 www.globalservicesmedia.com

Santiago ChileThe Magnet for AmericansC hile’s steady economic growth has transformed Quick Facts Santiago into one of Latin America’s most City Santiago modern metropolitan areas, with extensive Region South America suburban development, dozens of shopping Country Chilecenters, and impressive high-rise architecture. It has very City real estate cost Apartment for sale: US$1,720modern transport infrastructure. per sq m Santiago has the attributes that have made emerging Major service providers in the Polaris Software Lab, Politec,markets attractive to outsourcers, such as cheap wages, city Evalueserve, TCS, Accenture,dependable, state-of-the-art infrastructure, and govern- Capgemini, Equifax, Citigroupment incentives. Santiago contributes around 45 percent Combined IT-BPO export $300–$350 Million (2008)to the total GDP. Primary language spoken Spanish Santiago is the capital and the largest city of Chile. It Other languages spoken Englishis considered as the administrative, industrial, commercial, Literacy rate 95.7 percentfinancial, and cultural nerve center of Chile. The city has Time zone UTC/GMT −4 hoursa population of 5,822,316 with 95.7 percent literacy rate. Currency Chilean peso (CLP)Chile has a workforce of about 7.2 million, 3.1 million of Exchange rate 1 USD = 476.8 Chilean pesoswhich is in Santiago, Unemployment rate 10.8 percent (2009) In addition to the United Nations offices, Santiago ishome to many international company headquarters forLatin America, and the city is often the first choice for Other companies that have set up their operations inLatin American investment. Santiago are: the Brazilian IT company Politec for SAP In recent years, due to the strong growth and stability solutions; Evalueserve for market research, equity andof the Chilean economy, many multinational companies IT analysis; TCS for back office functions and softwarehave chosen Santiago as the place for their headquarters application development; Accenture for IT consulting;such as HP, Reuters, Procter & Gamble, Intel, Coca-Cola, Capgemini for financial services, BHP Billiton, and Shell.Unilever, Nestlé, kodak, BHP Billiton, IBM, Motorola, In 2009, US company Equifax opened a software lab inMicrosoft, Ford, yahoo! among others. Santiago. Equifax selected Santiago because of the “safety Polaris Software Lab, a specialist in Information of the city and country, political and economic stability,Technology (IT) for the financial sector, opened a new and the knowledge of its young professionals,” says MarioLatin American development center in Santiago in 2009. Godoy Zanni, CEO of Equifax Chile. Santiago also is aPolaris has identified Latin America as an integral growth magnetic place for Americans, he adds. “There’s alwaysmarket for its expansion strategy. “Santiago offers quali- someone from Atlanta visiting.”fied professionals at competitive (salaries),” said Cristian Andre Schenkel, the director and senior vice presidentBasauri, the company’s senior vice president for Latin of Citigroup’s Chile Technology Services Center saysAmerica. “We are going to recruit local talent to under- Santiago is “extremely safe by South American standards.”stand the market. On this basis, we will implement our It’s a livable city. Citigroup has clients in New york whoproducts and insert ourselves into the local system,” spend 2 hours on a train to get to work. “I have a 7-minuteexplained kartik kaushik, CEO for America. walk,” Schenkel notes. Citigroup recently expanded its128 GS Destinations Compendium 2010 www.globalservicesmedia.com

city Profile � Santiagoworkforce there to 125; most are developing new financial literacy levels and strong educational system make thesesoftware tools. Oracle has a 200-person IT office, with 75 graduates well suited for the IT and kPO industry. Theworking on software development. It plans to double its government has introduced various programs to improvestaff in Chile before 2011. English language skills that include mandatory English Costanera Center is a mega project in Santiago’s languages from 5th grades in the school to universityfinancial district. This includes a 280,000-square-meter level. On the other hand, CORFO, the investment pro-(3,000,000 sq ft) mall, a 300-meter (980 ft) tower, 2 office motion agency of Chile has created a national register oftowers of 170 meters (558 ft) each, and a hotel 105 meters English speakers where interested individuals are evaluated(344 ft) tall. When completed in 2012 it will be the tallest on “Test of English for International Communication”building in Latin America. (TOEIC) score, a test that measures the capability to per- The city has good infrastructure for the IT-BPO indus- form in a bilingual working environment.try. It offers a large and ready talent pool. A large number There are over 130 IT-BPO companies in Santiago.of companies source Spanish language call centers and The major IT-BPO services sourced from Santiago includeBPO services from the city. The government of Chile pro- IT services, customer support, finance and accounting,vides financial and other support for high-end industries human resources, marketing, and technical support. Theand setting up an IT-BPO business in Chile is fairly easy. combined IT-BPO export from the city was betweenThe city is very well situated for $300M and $350M in 2008.near-shore business due to simi- The World Economic Forumlar time zone and cultural affin- ranks Chile highest among allity with the United States. IT salaries are lower in Chile Latin American countries in its Favorably located in the mid- than they are in Mexico, anoth- Global Competitiveness Index,dle of the country, Santiago is a er near-shore option for out- citing such factors as the avail-short distance from 2 major ports sourcing engineering work ability of scientists and engi-and has an international airport neers. Chile has a wide businessoffering departures to 187 desti- network of free trade agreementsnations. In addition, the city has with countries in Asia, Latinefficient transport infrastructure, major banking institu- America, the European Union, and the United Statestions, and highly regarded universities. Santiago’s telecom which provides Santiago with a great opportunity as aninfrastructure is the best in Latin America with high speed outsourcing destination.connectivity. In 2008 Chile’s outsourcing industry brought in $843M Santiago offers significant cost advantage in terms of in revenue, of which $169M were from ITO and $198Mcompetitive wage-rates, and lower operating and living were from BPO services. Chile will be exporting $5B incosts compared with other cities in the Americas. On aver- services by 2015 according to current projections.age, IT salaries are lower in Chile than they are in Mexico, While Chile is rising, there is little fear of it topplinganother near-shore option for outsourcing engineering India or its Latin American neighbors as an IT hub. Thework. Wages tend to be on par with those in Brazil, but software services sectors in Brazil, Mexico, and Argentinarent averages 40 percent less in Santiago than in São Paulo. are much larger than Chile’s $820M sector. Tech centersThe Chilean government also offers incentives, including elsewhere in Latin America are expanding rapidly becausegrants for IT outsourcers. of their much larger labor forces—Chile’s entire workforce Santiago is the educational hub of the country and over of 7 million is smaller than the metropolitan populations22,000 graduates enter the workforce each year. The high of São Paulo or Buenos Aires. GS SNAPSHOT➤ There are over 130 IT-BPO companies in Santiago. The major IT-BPO services sourced from Santiago include IT services, customer support, finance and accounting, human resources, marketing, and technical support.➤ Santiago offers significant cost advantage in terms of competitive wage-rates, and lower operating and living costs compared with other cities in the Americas. On average, IT salaries are lower in Chile than they are in Mexico. Wages tend to be on par with those in Brazil, but rent averages 40 percent less in Santiago than in São Paulo.➤ Santiago is the educational hub of the country and over 22,000 graduates enter the workforce each year.➤ The World Economic Forum ranks Chile highest among all Latin American countries in its Global Competitiveness Index, citing such factors as the availability of scientists and engineers.129 GS Destinations Compendium 2010 www.globalservicesmedia.com

Shenzhen ChinaThe China- Hong Kong LinkS henzhen is a coastal city in southern Quick Facts China. Shenzhen is fourth on the Chinese City Shenzhen mainland in terms of economic power and one Region East Asia of the cities that has generated the biggest eco- Country Chinanomic returns. City population 14 million In 2009, Shenzhen’s economy maintained a healthy GDP per capita USD 13,581momentum of development. GDP grew by 10.7 percent Major service providers in the IBM, Oracle, HP, Microsoft,to $120B, according to the city’s development and reform city Siemens, Zensarcommission. Its per capita GDP grew to $13,581, topping Primary language spoken Mandarinthe country. Due to the global economic crisis, Shenzhen’s Other languages spoken Cantonese, Chinese, Englishforeign trade volume dropped 10.4 percent compared Time zone UTC/GMT + 8 hourswith the previous year to $270.155 B, but still ranked firstamong the nation’s large and medium-sized cities. The Currency Chinese yuan (CNY) Exchange rate 1 U.S. dollar = 6.63979762city has set a goal of 11 percent GDP growth for itself in Chinese yuan2010. Unemployment 2.6 percent (2009) Shenzhen hosts 15 percent of China’s IT industry. Morethan 400 of the world’s 500 largest companies have theiroffices in the city. Shenzhen is a huge software and IT serv- well-known domestic and international technology compa-ices outsourcing base. The city is already well recognized nies. Many of them, such as king Dee, kingdom, Tencent,internationally as a software and IT city and companies MCM, kejian, Oaking, Guanri, Liming, Aspire-Tech haveworldwide see this region as a place to locate when looking become tenants of the Park. Bank of China, China Mobile,at China outsourcing. ChinaSoft, NeuSoft, Powerise, HuaSheng, QiMing, as A number of domestic and foreign outsourcing service well as IBM, Oracle, HP, Microsoft, Siemens, Zensar,companies take Shenzhen as an international business base Bank of Switzerland, and Orange Communications haveto accelerate the expansion of business such as IBM, Evans, invested in research and development facilities within theDa Zhan, Peng kai, Freeborders, CS&S, Huawei, ZTE, Software Park.and Tencent. The Shenzhen Software Park and its member compa- Shenzhen Software Park is an important vehicle estab- nies have targeted 3 major segment of the software exportlished by the government to support the development of market: software exporting and outsourcing, embeddedsoftware industry of the city. The Park was founded in software, and IC design. Many multi-national software1996 with an area of 11.5 sq km. The Park is integrated companies have used the Park for their software and ICwith Shenzhen Hi-tech Industry Park in the Nanshan design outsourcing needs. IBM operates a global servicesdistrict of Shenzhen. delivery center along with its global procurement center The Shenzhen municipal government has also built the there. Oracle created the Oracle Technology Resourcenecessary ancillary infrastructure required to support the Center in the Park to perform integration to the OracleSoftware Park, including housing, hospitals, training and platform. More than 1,500 software enterprises are settlededucation facilities, libraries, and recreational facilities. in the Shenzhen Software Park, collectively employing overThis, in turn, has attracted to the Park a large number of 100,000 engineers.130 GS Destinations Compendium 2010 www.globalservicesmedia.com

city Profile � Shenzhen Shenzhen Software Park’s offshore Development Center 50,000 students on campuses citywide. The area has beenfocuses on the high-end of ITO and BPO projects in the a magnet for IT engineers from all over the country. Thereareas of BFI (banking, finance, insurance), TWU (telecom, are about 800,000 engineers working in IT/high-techwireless & utilities), and MRD (manufacturing, retail, and related areas.distribution). The average age in Shenzhen is less than 30. About 88 The city has well-developed communication infra- percent of the total population is between the ages of 15structure, including designated trunks for international and 59, thus forming one of the youngest labor forces ingateway. Shenzhen is a link between the Chinese mainland the country. Labor costs are also substantially lower than inand Hong kong and a transport neighboring Hong kong.hub in coastal southern China. During the first 8 months ofShenzhen is located less than 45 The Shenzhen Software Park 2010, China’s software businessminutes away from downtown achieved revenue of CNy828.6 and its member companiesHong kong. The city has an Billion ($124.7B), a year-on-international airport that con- have targeted 3 major segment year increase of 29.8 percentnects to 18 international cities. of the software export market: and the growth rate was 8.8Shenzhen is the terminal sta- software exporting and out- percent higher than the sametion for the important Beijing- sourcing, embedded software, period of 2009, according toto-Shenzhen railway route. In China’s Ministry of Industry andorder to attract more businesses and IC design Information Technology.and accommodate the growing During Jan–Aug 2010,demand of the population, new China’s software export wasroads and railways projects such as the Guangzhou- $14.4B, a year-on-year increase of 26.4 percent. TheShenzhen Coastal Expressway and the Shenzhen-Hong growth rate was 14.6 percent lower than the same periodkong Express Rail Link are under construction and are of last year, but 3.7 percent higher than that in the first-expected to be completed in 2012. half of 2010. Its export of software outsourcing services The city leads in high-tech, financial services, foreign was $1.75B, a year-on-year increase of 30.4 percent andtrade, shipping, and creative cultural industries. the growth rate was 6.7 percent lower than the same period There are 10 universities located in Shenzhen, with of last year. GS SNAPSHOT➤ Shenzhen hosts 15 percent of China’s IT industry. More than 400 of the world’s 500 largest companies have their offices in the city.➤ About 88 percent of the total population is between the ages of 15 and 59, thus forming one of the youngest labor forces in the country. Labor costs are also substantially lower than in neighboring Hong kong.➤ In 2009, Shenzhen’s economy maintained a healthy momentum of development. GDP grew by 10.7 percent to $120B, according to the city’s development and reform commission. Its per capita GDP grew to $13,581, topping the country.➤ Due to the global economic crisis, Shenzhen’s foreign trade volume dropped 10.4 percent compared with the previous year to $270.155 B, but still ranked first among the nation’s large and medium-sized cities.131 GS Destinations Compendium 2010 www.globalservicesmedia.com

The Merlion, a national symbol of Singapore(Source: Wikipedia) Singapore City Singapore Growing Into the “Trusted BPO Hub of the Region” S ingapore is a country that is often mentioned Quick Facts for outsourcing. Singapore is growing at double- City Singapore digit rates in terms of both volume and value of Region East Asia the electronic commerce and payment business, Country Republic of Singapore and is closest to its clients in a region that has highest City Population 5,076,700 (2010) growth potentials. City Average Monthly Entry Level $1,500–$1,900 The nation is thinking big in terms of being a BPO hub Salary (in US$) per month (BPO) in Asia. The Singapore government as well as its lead strategy City Average Monthly Entry Level $2,300–$3,300 planning and executing agency, the Economic Development Salary (in US$) per month (ITO) Board, are hard set to push the small island nation in Asia City Real-Estate Cost $859 per square foot to develop into a “trusted BPO hub of the region”. The Major Service Providers in the Citibank, Credit Suisse First Singapore government has committed to develop the nation City Boston, Hewlett-Packard, IBM into a high value-added BPO hub. Singapore recently leapt and Microsoft, into first place in the global IT economy rankings produced Primary Language Spoken English by nonprofit Tech-Economy.org, surpassing the United Other Languages Spoken Malay, Mandarin Chinese, Tamil States and Sweden. Singapore earned top marks for its free- GDP S$74,925M (2010) trade policies and visionary government. Time Zone SST (UTC+8) Singapore boasts of a well-educated population with a Currency Singapore dollar (SGD) highly skilled workforce and a strong pool of senior man- $1 = 1.29 SGD agers. It has a world-class telecommunications infrastruc- Unemployment 3 percent ture and very stable political and economic environment. Singapore is competitive for high-end requirements. Because international trade and finance. After a contraction of 6.8 its infrastructure is so strong and its business environment is percent in the 4th quarter of 2009, Singapore claimed the so favorable, it has fared well as an outsourcing location for title of fastest-growing economy in the world, with GDP data center operations and network management. growth of 17.9 percent in the first half of 2010. Although labor rates are relatively high, they are lower Singapore has great IT infrastructure and has been than those in the United States. Singapore is recognized often used for a regional data center hub. With its available by international agencies such as World Economic Forum, talent pool, infrastructure, and environmental advantages, Political and Economic Risk Consultancy and Business Singapore is rapidly transforming into one of the favorite Environment Risk Intelligence as one of the most condu- cities for investment in the Southeast Asia region. Singapore cive places in the world to do business. To date, over 7,000 will continue to focus its efforts towards attracting high- multinational corporations (MNCs) have established a end vertical-focused activities such as those in the financial presence in the country, of which 60 percent have chosen services industry, IT operations and business continuity to make Singapore their regional headquarters. Many and disaster recovery functions. With all these qualities, have also chosen to site their global or regional IT hubs Singapore is well positioned to be the trusted hub for stra- in Singapore. tegic IT-enabled activities such as global and regional CIO Singapore is the world’s fourth leading financial center functions, innovation centers, and technology develop- and a cosmopolitan world city, playing a key role in ment centers. GS 132 GS Destinations Compendium 2010 www.globalservicesmedia.com

Palace Square, as the main square of the Russian Empire it was the setting of many events of great historical significance (Source: Wikipedia) St. Petersburg Russia New Entrant into Product Development SectorO ften called the Northern Capital of Russia, Quick Facts St. Petersburg is one of the country’s major City St. Petersburg business centers. Its close location to Western Region Eastern Europe Europe also makes it attractive for foreign Country Russiabusinesspeople. The fourth-largest megapolis of Europe, its City Population 4,596,000 (2010 est.)geopolitical, intellectual, economical, cultural, and histori- City Average Monthly Entry Level $6,000cal advantages are unique. Salary (in US$) per month (BPO) In the product-development sub category, the city of City Average Monthly Entry Level $10,000St. Petersburg has figured as a new entrant in the emerging Salary (in US$) per month (ITO)city space. Unlike IT-BPO companies, product-develop- City Real-Estate Cost $96.87 per square feetment companies have a very niche market. The educa- Major Service Providers in the Luxoft, Intel, Sun Microsystems,tional structure of St. Petersburg is capable of generating City Sovkomflot, Petersburg Fuelskills required to make the city one of the most potential Company and SIBURoutsourcing cities for product development. The strong Primary Language Spoken Russian, Englishpresence of offshored product-development companies Other Languages Spoken Estonian or Finnishsuch as Reksoft and DataArt displays the growing activities Literacy Rate 99.4 percentin this space. The city is known as an established destina- Time Zone MSK/MSD (UTC+3/+4)tion for engineering and R&D services. St. Petersburg also Currency Russian Ruble (RUB)has expertise in areas such as R&D, health-care services, $1 = 31.05 RUBengineering services, etc. Unemployment 9 percent Local governments provide additional incentives to ITcompanies. For example, St Petersburg allows IT compa- the coming years. St. Petersburg is a strong leader in thenies that have invested more than $1.8M in the city to ratings of the most investment-attractive regions of Russia.enjoy a reduced profit tax rate of 20 percent (normal rate Its great intellectual, scientific, and personnel potential24 percent) and companies whose investment in the city and stable development in the previous years gives the cityexceeds $5.6M additionally enjoy 50percent concession a comfortable atmosphere for business start-up and devel-on property tax. opment. The government is trying to encourage economic St. Petersburg is well ahead of the other regions of growth and assist the business community in the city.North-West Federal Region by the basic indices of social With an increasing amount of foreign interest andand economic development, especially in civil construc- investment in St. Petersburg, the city is fast becomingtion and trade. A lot has been rich along with its inhabitants.done for the development This has a great effect on propertyof the transport complex, St. Petersburg has expertise prices, which has driven skywardsimprovement of the industry in areas such as R&D, health- over the past few years. As per thestructure, attracting tourists, World Bank, Russia’s economy care services, engineeringand culture development. All will see a robust recovery in 2010,these actions have set the base services, etc. but unemployment will remainfor steady economic growth in high. GS133 GS Destinations Compendium 2010 www.globalservicesmedia.com

Toronto’s skyline from the island(Source: http://pages.interlog.com/~gilgames/toskyln.htm) Toronto Canada The ICT Hub with Depth and Variety T oronto is the technological heart and soul Quick Facts of Canada. The city’s vital Information and City toronto Communication Technology (ICT) bunch has Region North America been providing more than $20B annually to the Country Canada economy. City Population 2,503,281 Toronto is the commercial, distribution, cultural, finan- City Average Monthly Entry Level $2,000–$2,400 cial, entertainment, and industrial center of Canada, as Salary (in US$) per month (BPO) well as the banking and stock exchange center of Canada. City Average Monthly Entry Level $2,200 It should be noted that many world-leading high-tech Salary (in US$) per month (ITO) companies are drawn to Toronto to invest and grow their City Real-Estate Cost $2 to $3 per square feet. operations. It is the country’s main wholesale and distribu- Major Service Providers in the Accenture, Cognizant, EDS, tion point. Ontario’s wealth of raw materials and hydro- City Infosys, LogicaCMG, TCS, Unisys, electric power has made Toronto a chief center of industry. etc. According to the Branham300 (2009), of the top 250 Primary Language Spoken English Canadian ICT companies, 40 percent are headquartered Other Languages Spoken French in the Toronto region. GDP $248 Billion Over the past few years, the City of Toronto together Time Zone EST (UTC-5) with other orders of government, has been working in close Currency Canadian dollar association with ICT industry stakeholders to produce a $1=1.01 CAD strategy for this strategic sector with the aim to become and Unemployment 9.44 percent be recognized globally, as one of the five most advanced, creative, and fruitful locations in the world for ICT research, education, business, and investment by 2011. Canada. The city is an important center for the media, ICT Toronto, a multi-stakeholder partnership was pro- publishing, telecommunications, information technol- duced to function as an advisory and reference group and ogy, and film production industries; it is home to major potential ICT think tank to carry out the ICT Strategy. companies such as Research In Motion, BCE, Thomson Toronto’s leading economic sectors include aerospace, Corporation, CTVglobemedia, TELUS, Celestica, Nortel transportation, media, arts, film, television production, Networks, CGI Group, Softchoice, MTS Allstream, publishing, finance, business services, telecommunications, Aastra Technologies, Open Text, Mitel Networks, Shaw software production, medical research, education, sports Communications, CAE, MacDonald, Dettwiler and industries, and tourism. The Toronto Stock Exchange— Associates, and Rogers Communications, etc. the world’s eighth largest in terms of market value—is In terms of employment, the service side of the ICT headquartered in the city. cluster is the largest, followed by development and manu- Toronto is Canada’s prominent media market, and the facturing. The City of Toronto has over 50 percent of all fourth largest media center in North America (behind ICT companies located in the Greater Toronto region. New york City, Los Angeles, and Chicago). Toronto is a The city distinguishes on two key location factors, offering major international center for business and finance. By strong competitive advantages including labor force avail- and large, Toronto is regarded as the financial capital of ability, and market accessibility. 134 GS Destinations Compendium 2010 www.globalservicesmedia.com

city Profile � toronto The Toronto region leads North America in offering a and Ontario’s provincial tax exemptions provide somediverse, talented pool of Interactive Digital Media services. of the most magnanimous R & D tax benefits for busi-The digital media industry consists of more than 950 com- nesses. The City’s taxation measures are expended topanies employing about 16,000 people and approximate maintain and increase necessary programs and servicesrevenue of between $1.1 Billion and $1.2 Billion annually that are vital for a prosperous Toronto. After a solid eco-in Ontario. A number of major corporations are estab- nomic growth and inflation in the first half of 2007, thelished in the city, including the Hudson’s Bay Company, economy began to go through slower growth since theManulife Financial, TD Canada Trust, Canadian Imperial second half of 2007 due to the global ripple effects causedBank of Commerce, Royal Bank of Canada, Scotiabank, by the sub-prime mortgage crisis in the United States. AsBank of Montreal, Celestica, Four Seasons Hotels, Rogers of June 15, 2010, the goods and services tax (GST) rateCommunications, MDS Inc., and many others. has been 5 percent. The level of Taxation in Canada is Toronto, with a population of 2.48 million people (5.5 average among Organisation for Economic Co-operationmillion in the GTA—Greater Toronto Area) is acclaimed and Development (OECD) countries. Approximatelyas one of the most multicultural cities in the world and 70 percent of the Canadian government’s income comesis graded as the safest large metropolitan area in North from taxation, the rest from investments, tariffs, and fees.America by Places Rated Almanac. Corporations functioning in Ontario are generally taxed Toronto’s overall employment in 2009 was 1,291,200 at a rate of 30 percent.down by 1.4 percent from 2008. During the past year, By way of equivalence, there is a combined rate of taxa-growth was found in half of the major employment sectors, tion that is less than the combined statutory U.S. federalwherein the services sector grew by 0.9 percent. Despite and state tax rates as follows:the slowing economy, Toronto continues to be a suitableplace for new startups and relocations from elsewhere. Canada Ontario CombinedAnnual sales for the ICT cluster amount to over $32.5 General 19.0% 12.0% 30.0%Billion, whereas the annual exports for this cluster are Manufacturing and processing 18.0% 10.0% 28.0%over $6.2B. Toronto’s GDP is $138B. The unemployment Small business 11% 4.50% 15.5%rate is 9.99 percent, and the total labor force amounts to1,487,960. Toronto is a world leader in digital microwave Source: http://www.toronto.ca/invest-in-toronto/tax_rates.htm (2010 Corporate Income Tax Rates).transmission, satellite communications services, and datadistribution networks. Toronto ICT potency lies in software and systems devel- In this context, it is advisable to note that the corporationsopment, manufacturing, and ICT services. Toronto ICT operating in this location collect employment insuranceCluster is the largest in Canada and third largest in North premiums and Canada Pension Plan (CPP) contribu-America. Globally focused manufacturers and develop- tions, from both the employer and the employee, to pro-ers produce software, hardware, vide support for loss of employ-new media, and communications ment (including maternity leave)solutions that permeate and act ICT Toronto, a multi-stakehold- and retirement. There are alsoas accelerator in all areas of the er partnership functions as an employment insurance premiumseconomy. Toronto has more than to be paid by both the employee5,000 ICT companies. advisory and reference group and the employer. With a total number of and potential ICT think tank to Toronto’s competitive advan-130,511 graduates as of 2008, carry out the ICT Strategy tage dwells on its depth and vari-this city has a substantial poten- ety of its ICT operations. Withtial of human resources to serve its world-leading renowned post-different sectors. secondary education, R&D, expert talent pool, high-per- The Canadian Association of Internet Providers (CAIP) formance infrastructure, and supportive government ini-has grown to represent ISPs (Internet Service Providers) tiatives, Toronto is a natural place where information-ori-of all sizes from across Canada. Although there is still a ented companies can invest and excel. Additionally, theregreat chance to enhance the number of its members— are some important grounds to outsource services tosomething the organization is actively engaged in—its Toronto because of the following facts: reduced capitalcurrent members already supply almost 90 percent of the expense, improved IT performance and reliability, reducedInternet connections to Canadian homes, schools, and IT overhead, a technology edge over competitors, andbusinesses. Moreover, Canada’s federal R & D system access to different skills and technology as needed. GS135 GS Destinations Compendium 2010 www.globalservicesmedia.com

Warsaw City Center (Source: Wikipedia) Warsaw Poland Assuring a High Return on Investment H ot on the heels of many of the countries in the Warsaw- Quick Facts region joining the European Union (EU) earli- City Warsaw er this year, European-based companies are not Region Eastern Europe only looking at Central and Eastern Europe as Country Poland an outsourcing destination, but also to open offices there. City Population 1,711,466 (2009) Warsaw is the city that can expect the biggest influx of com- City Average Monthly Entry Level US$1,700 panies over the next five year. Warsaw comes top for low cost Salary (in US$) per month (BPO) of staff and best value for money of office space. City Average Monthly Entry Level US$2,000 Warsaw has a flourishing economy virtually free of Salary (in US$) per month (ITO) unemployment. It provides an appealing business environ- City Real-Estate Cost US$21–22 per sq m per month ment with a full array of modern business services and Major Service Providers in the Hewlett Packard, Accenture, Avon, well-groomed professionals familiar with western stand- City Dimar, HP, IBM, Maersk, Sitel, ards. It is the financial center of Eastern Europe and an Tschibo, TNT Express, France important consumer market. It has become the focus of Telecom, Transcom, ABN AMRO, foreign investments and a driving force in the growth Cili Group, CTM Teleperformer, Thomson, Quest-Tek, etc. of the entire country’s economy. Out of approximately Primary Language Spoken Polish 244,000 companies registered here, 98.5 percent are private. Warsaw enjoys first place nationwide in terms of per- Other Languages Spoken German, English centage of companies with foreign capital registered. One Literacy Rate 99 percent great advantage of Warsaw is its labor market. 20 percent GDP US$33,000 of the Warsaw population boasts a university degree. Time Zone CET (UTC+1); Summer DST (CEST) In the current economic condition, companies are seri- (UTC+2) ously looking to retain their core talent and processes while Currency Zlotych (PLN; symbol zł) $1 = 2.87 PLN attempting to reduce costs in non-core business operations. Unemployment 5.1 percent These usually include financial operations as well as HR, procurement processes, and IT, the latter being frequently outsourced to a third-party provider. reinforcement for the country’s dynamic economic growth Warsaw has the biggest engrossment of electronics in recent years. According to Article 41 of the Polish VAT and high-tech industry in Poland. In Warsaw, one can Act of 11 March 2004, the basic VAT rate on goods and clearly discover how the city is taking full advantage of services in Poland is 22 percent. This rate applies to most the magnificent and unparalleled chances originating from types of services. the emergence of free market and the development of The number of state-owned enterprises is decreasing on democracy. Moreover, it should be noted that Warsaw is a regular basis and the number of companies with foreign one of the fastest growing cities in Europe. The investment capital growing. The largest foreign investors are Daewoo, boom is visible all over in Warsaw. Warsaw’s average apart- Coca Cola Amatil, and Metro AG. ment price is down 10percent from the peak of Q2 2008. Those investing in Warsaw can be sure of a very high As per a latest report, Warsaw could get an additional rate of return on capital invested—a rarity in large cities, Billion Euros ($1.35B) from Brussels in 2011–2012 as and a developed, absorbent consumer market. GS 136 GS Destinations Compendium 2010 www.globalservicesmedia.com

ahmedabad, indiaA flourishing IT industry, excellent IT infrastruc- to promote the growth in IT industry. A successful exam- ture, internationally famed institutes such as IIM, ple is the development of Info-City, an IT hub providing DA- IICT, and more set against the backdrop of a a comprehensive platform to IT/ITES companies to setsupportive government ensure that Ahmedabad is slowly up their operations. Having a remarkable IT policy it isbecoming a preferred outsourcing destination. on the right side of legal and security issues. This city encapsulates a rich pool of English speaking The 3rd Eye Voice IT SEZ, the city’s first IT/ITESworkforce, that is 40 percent cheaper in comparison to special economic zone (SEZ), is set to become opera-other Indian metros. In addition, the crime rate here is tional in March 2011. Around a 100 small companieslow thereby providing a secure environment. functioning from different locations under Software The city also has a healthy supply of Grade A office Technology Park of India (STPI) scheme are planning tospaces here. The state government is actively endeavoring shift into the upcoming Rs 550 crore project. GS bangkok, thailandT hailand has set a challenging target – to be one of process outsourcing and COBOL programming and the world’s top three countries for outsourcing by development outsourcing. 2013, building a 4-Billion-baht industry. In line Majority of the country’s universities are located inwith this, an outsourcing association was formed in 2009. or around the capital. A large pool of computer literateThe Thai IT Outsourcing Association, or TITO. and English speaking professionals, good IT skills, work Bangkok, capital of Thailand, dominates the country’s practice adhering to ISO standards, good broadbandeconomy. On the outsourcing map, the city is climbing connection ensure that outsourcing to Bangkok is a prof-up the ladder. itable option. In the short term, it is looking at animation and dig- On the flip side, Thailand is not the cheapest of loca-ital content outsourcing, which fits in with Thailand’s tions. Also it is beginning to face a shortage of engineers,creativity profile, and other fields such as database among other skilled workers as many have obtained jobsmanagement outsourcing services, accounting business overseas. GS bhubaneswar, indiaT he economic liberalization policy adopted by the outsourcing firms are here planning on expanding their Government of India in the nineties resulted in the setup. Future plans of Infosys call for investing $60M in metamorphosis of Bhubaneswar, capital of Odisha. Bhubaneswar for its second project.It drew large investments in the field of telecommunica- Many firms have planned long-term investment planstions, IT and higher education. for Bhubaneswar. For example, Genpact has announced It is home to Infosys, TCS, The Finland telecommuni- to set up a BPO center in the city, which is expected tocation company, Gennum Corporation, Pricewaterhouse generate 3,000 jobs. Similarly, MindTree Consulting’sCoopers Pvt. Ltd., Mahindra Satyam and Genpact new project for the city is likely to create 5,000 jobs inamong others.The city’s lucrative talent is a result of Bhubaneswar. However, these two projects are behindover 60 engineering colleges present here. Most of the schedule. GS brasilia, brazilF amed for its fighting spirit, stamina and skill on the Brasilia is armed with a valuable labor pool which is football pitch, Brazil is set to show the same quali- cheaper in comparison to almost all other South ties in the field of outsourcing. American or European countries. However, India and In their quest for a suitable offshore location, buyers China are still a step up when it comes to cost advantage.search with a checklist encapsulating labor costs, political, In addition, there is also a lack of IT professionals witheconomical and social risks amongst others. Brasilia gives a good communication (English) skills. Government andcomforting answer to most of these check points. This city industry traders are working towards rectifying thisis excellent in many outsourcing sectors such as e-com- problem by developing copious training programs thatmerce, financial sector, games and software management. focus on English speaking. GS137 GS Destinations Compendium 2010 www.globalservicesmedia.com

bucharest, romaniaO nce known as ‘Little Paris’, Bucharest’s talent Bucharest houses Genpact, Wipro and Teleperformance’s pool has made it the ‘almost’ perfect land for - three of the largest outsourcers- largest operations in cen- outsourcing. Praiseworthy resources backed with tral and eastern Europe.not so praiseworthy government policies makes this city The downside of this city is that the Romanian state‘almost perfect.’ does not recognize outsourcing activity as a distinct Proficiency in English, French and German, excellent business. The absence of separate recognition spells thatIT skills, job commitment, low absent rate coupled with outsourcing activities have to fit in with other activitieslow costs has ensured buyers prefer Romanian workforce. recognised by the government.On the export front, this city embraces strong hold in However, Romanian government is working towardsR&D outsourcing, security and embedded software devel- making the city better suited for outsourcing. For this, it isopment and mechanical engineering outsourcing. enhancing rural broadband access. GS cape town, South africaE conomic center of the Western Cape Province, have their call canters here. Cape Town has over the years established itself as a The allure of Cape Town, South Africa’s capital, is preferred outsourcing destination. strong government support, state backed incentives – BPeSA Western Cape was founded in 2001 to promote start-up and expansion grants and discounted telecom-and develop the IT-enabled services industry in Cape munication prices, time zone compatability with EuropeTown, with a strong initial focus on contact centers. It and a favourabe exchange rate. In addition, English is theoperates both as a specialist investment promotion agency primary language for over one million residents of thefor business process outsourcing (including call centers) capital. Thus, there are little issues with accent for cus-and as a regional trade association and networking body tomers in Uk. However, the labor costs of English speak-for the industry. ing workforce are double in comparison to Philippines Several big names like TeleTech and Royal Dutch Shell and India. GS Dubai, UaeP erceived as a trading hub and shopping paradise, Outsourcing Forum have joined hands to support the Dubai is slowly but swiftly establishing its foothold in business requisites of Middle East region. the global outsourcing market. This development has Despite strong support from Dubai’s authorities, buy-been characterized by copious government initiatives. One ers find labor costs expensive. However, in order tosuch initiative being Dubai Outsourcing Zone (DOZ) – the ensure higher costs do not play show stopper, the Dubaifirst free zone in the world-which is aiming at making this government offers benefits such as 100 percent tax-freedestination the perfect base for outsourcing operations. environment for 50 years, no corporate tax, no income Recently, DOZ, a member of TECOM Investments, tax, no custom duty, 100percent foreign ownership, noannounced a partnership with the Arab Outsourcing restriction on profit or capital repatriation and reducedForum for the second consecutive year. DOZ and Arab real estate cost. GS Glasgow, UKG lasgow city boasts of having the largest economy academic research. in Scotland with the third largest GDP per capita The Customer Contact Association, the professional in UK, after London and Edinburgh. The call body for the Call Center, Contact Center, and Customercenter industry started mushrooming here since the 1990s. Service Industry in the Uk, is headquartered in Glasgow.Today, a large percentage of Scotland’s call center employees Dell’s second largest business center outside the US isare employed in Glasgow. based at Glasgow’s City Park. Eaton has had its shared One of the attractions of Scotland, is its proximity to service center operations in Glasgow since 1997 becauseLondon. Also, there is a pool of educated human resource of its reputation as a financial services center with aas the city is a major center of higher education and skilled and multilingual workforce. GS138 GS Destinations Compendium 2010 www.globalservicesmedia.com

Guadalajara, MexicoG uadalajara, capital of the Mexican state of Jalisco, Siemens, Flextronics, TCS and Jabil Circuit have opera- has the second largest economy and industrial tions based in the city. infrastructure in Mexico. This city contributes Guadalajara is host to good universities and educa-37percent to Jalisco’s total gross production. tional centers thus producing a talent pool of valuable Electronics and information technology sectors have human resource. Also, its proximity to US, reduced tar-gifted this destination the title ‘Silicon Valley of Mexico’. It iffs under NAFTA, treaty rules facilitating bilateralis Mexico’s main producer of software, electronic and digit- trade, favorable exchange rates and good infrastructureal components. General Electric, IBM, Intel Corporation, brings this destination to the list of top 100 outsourcingFreescale Semiconductor, Hitachi Ltd., Hewlett-Packard, cities. GS istanbul, turkeyI stanbul, Turkey’s largest industrial center generates and proximity to Europe. Its weaknesses include the fact 21.2 percent of Turkey’s gross national product and that the call center sector is not yet totally recognized by contributes 40 percent of all taxes collected. This second the government.largest city in Turkey produces 27.5 percent of the country’s As Siemens Business Services and Lufthansa servenational product. their customers from Istanbul, it is becoming the ‘back- The allure of Istanbul lies in its ample and low-cost yard’ of German speaking countries.workforce, availability of large number of qualified peo- About150 call centers are situated in Istanbul. Theple who are fluent in German language, low staff turno- banking industry employs about 40percent of the work-ver, flexible labor laws, low set up and operation costs force, followed by mobile telephone service suppliers. GS Jakarta, indonesiaI ndonesia aspires to rival India and China in the out- graduate capable of reading and writing this language. sourcing gamble and it’s relying on Jakarta, its capital Although, the wages are relatively low there is a shortage and largest city. However, in order to accomplish its of manpower.aspirations, this destinatiaon needs to cover up its pitfalls. Recently, this destination was in news as Minister of Jakarta offers one of the brightest students and pro- manpower and transmigration Muhaimin Iskandar plansgrammers who have proven their worth in numerous to rearrange existing outsourcing work contract system.competitions. On the language front, all students get a The reason being, current system was considered to causeminimum of six years of English language, making every losses to workers. GS Kyiv, UkraineK yiv, the capital and largest city of Ukraine, is home customers. This destination is well tailored to conduct to many high-tech industries and higher education services with Western European countries. However, institutions . Barclays Capital, announced in June issues such as communication and employee retentionthis year that it has chosen Kyiv as the location for its third have been causing inconvenience to the buyers.global technology center. Kyiv’s exceptional technical talent kyiv has the highest salaries for IT employeescoupled with strong analytical skills made this the chosen as compared to other Ukranian cities like kharkov,city. Also, for Western European and North American citi- Donetsk, Dnepropetrovsk, Lvov.zens there are no visa compulsions here. kyiv hosted the IT Business Forum dedicated to Approximately 50 percent of the graduates in the cap- promotion and development of the Ukrainian softwareital are hired to provide professional services to European development and outsourcing market in 2009. GS139 GS Destinations Compendium 2010 www.globalservicesmedia.com

Montevideo, UruguayA late entry on the outsourcing map, Uruguay’s The country’s main technology park, Zonamérica, is capital Montevideo already houses eminent play- located in Montevideo where tax exemptions under the ers such as Tata Group, TCS, Accenture, IBM, HP, Free Zone system are granted.Towers Watson and Sabre Holdings. Credit goes to the IT and consulting services are provided fromcapital’s technically able workforce. The geographic loca- Montevideo to more than 30 clients.tion (GM-3) of Uruguay gives it an added advantage in English is not widely spoken in this city. However, itdoing business with US and east cost. Also, the government boasts of a small percentage of bilingual IT professionals.policies – exporting software from Uruguay has no taxes- Some 37 percent speak English.encourages the development of this industry. Uruguay and On the legal front, absence of specific incentives forin particular Montevideo are noted for a high standard of the outsourcing service sector is seen as aliving at a low cost. missing link for the industry’s growth. GS Moscow, russiaM oscow encompasses good human IT- resources, model of process maturity for software development. developed infrastructure and a significantly In addition, the cost of infrastructure is high. Moscow large pool of OSD providers. Man power is the world’s fourth most expensive city for expatriates,geared up with latest technical skills is available at low costs. according to the Worldwide Cost of Living Survey 2010The competitive advantage of this city is its R&D skills. from Mercer. However, there are few disadvantages attached to this Nokia Siemens Networks announced plans incity, legal issues being intellectual property rights, export September this year to set up a Global Networkand import, taxation, labor and currency law. Also, Operations Center (GNOC) near Moscow. The compa-Russia does not have any agency that provides CMM ny plans to make a significant investment over a period(Capability Maturity Model) assessment, which is a of five years to develop the center. GS Mysore, indiaT he second largest city in the state of Karnataka, This city pays huge importance to the education Mysore’s proximity to the ideal outsourcing des- sector. It houses University of Mysore, whose alumnus tination Bangalore makes it a preferred destina- include N.R. Narayana Murthy, National Institute oftion. Engineering, prestigious B-Schools such as SDMIMD, Since 2003, IT companies have cast their footsteps in JSS Center for Management studies and Bhavan’sthis city. Today, Infosys has established one of the largest Institute of Management.technical training centers in the world and Wipro has Vast and affordable talent pool, good infrastructureset up its Global Service Management Center (GSMC) and supportive government ensures outsourcing to thisat Mysore. destination is profitable. GS Nizhny Noygorod, russiaF ourth largest city of Russia, Nizhny Noygorod is Technical University, and Nizhny Novgorod Institute the economical and cultural center of Volga-Vyatka of Information Technologies. Thus, it comes as no economic region. surprise that this destination ranks amongst the lead- This city is home to 25 scientific R&D institutions ing Russian cities in regard to quality of software R&Dthat emphasis on telecommunications, radio tech- providers.nology, theoretical and applied physics. In addition, Tecom, Devetel Ltd., MERA Networks, RealEastthere are 33 institutes focusing on higher education Networks, Auriga and Teleca are the outsourcing soft-such as Nizhny Novgorod State Medical Academy, ware developers that cater to telecommunication ven-Nizhny Novgorod State University, Nizhny Novgorod dors. Also, Intel has opened its R&D center here. GS140 GS Destinations Compendium 2010 www.globalservicesmedia.com

Penang, MalaysiaM alaysia’s second smallest state Penang is the Government policies -no income tax for up to 10 third-largest economy amongst the states in years, investment tax allowance, no duties on import of Malaysia. This destination houses key outsourc- multimedia equipment for Malaysia Status Companiesing players such as IBM, Idea Capital, Intel, Motorola, -are encouraging. GSMoBif, Citicorp, Agilent, JABIL Shared Service Center,DELL, Seagate, National Instruments, PMC Sierra. Education plays a significant role in this city as ithas 33 universities and private colleges. Thus, thereare plenty of English speaking developers available.However, in comparison to China and India the laborcost is expensive. Perth, australiaP icture perfect Perth takes pride in being placed between the vendor and client, English-speaking eighth in The Economists 2010 list of Worlds Most population, and proximity to worlds top markets and Livable Cities. Once known as the City of Lights, Government support.it encapsulates fantastic weather, lovely beaches, grand golf The Perth managed services sector is saturated withcourses, good infrastructure and friendly inhabitants. providers including ASG, CSC, Empired and Fujitsu, The capital and largest city of Australia, Perth domi- which benefit from lengthy government contracts, withnates the Western Australian economy. Also, it houses still more coming in, like CSG. GSfour public and one private university churning out edu-cated workforce. Thus, there are many driving factors foroutsourcing firms - access to cheap skills, cultural match Seoul, KoreaT he Seoul Special City, capital and largest city of produces educated resources. However, English is an South Korea, ranks 10th on the chart of top ten issue. Outsourcing centers face difficulties in finding global cities in the Global City Index of 2010. This manpower with language compatibilities.city accounts for only 0.6percent of South Korea’s land, The future looks bright for Seoul as South korea’s ITyet it generates 21percent of the country’s GDP. Equipped market is projected to strengthen in 2010. Also, Southwith highly technological infrastructure, this destination is korea plans to invest $341.1M by 2013 for developingheadquarters for Samsung, LG, Hyundai, Kia and SK. local software industry. GS Home to a large number of universities-Seoul NationalUniversity, korea University and yonsei University- it taipei, taiwanA s the capital of Republic of China, Taipei is the university,National Taiwan University (NTU), nucleus of rapid economic development in the National Taiwan Normal University, Mandarin country. It is the largest city of Taiwan, that holds Training Center and more. Thus, it generates a talentone of the world’s largest foreign exchange reserves for over pool of valuable workforce.$352B. The GDP per capita of Taipei is 48,400, the second This destination is performing well in manufacturinghighest in Asia. outsourcing space. Credit goes to its growing outsourc- On the education front, 20 universities have cam- ing orders for notebooks and PCs. In addition, Taiwan’spuses located in this city. These include National cellphone shipment is expected to rise 23.8percent to hitChiao Tung University (NCTU) - Taiwan’s oldest 26.26 million. GS By Smriti Sharma141 GS Destinations Compendium 2010 www.globalservicesmedia.com

Destinations Compendium 2011One Stop Resource On Global Outsourcing Destinations RELEASING NOVEMBER 2011 Inviting countries, cities, associations to take part in this initiative For more details, write to satishg@cybermedia.co.in

Destination Compendium 2010

by Global Services on Dec 10, 2010

Accessibility

Categories

Tags

Upload Details

Usage Rights

1 Embed 1

Statistics

Destination Compendium 2010 — Document Transcript