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Hangzhou, China                A City of Financial Delivery Center                  Demonstration City of Chinasourcing   ...
2011 the West Lake, Enlightenment and Discussion               Discovery, Transformation, Reaction, Share  To Combine the ...
Global ServiceS                                                                       A CYBERMEDIA PuBlICAtIonAn integrate...
YOUR STRATEGICTECHNOLOGYPARTNERBuilding solutions forFinance, Telecom, IT,Automotive and Energysectors 5000+ best in clas...
EDItoR’S notE                                                         Global City                                         ...
True Public Private Partnership                                    Reliable Infrastructure                     Central Loc...
CoNTENTS                11                     THE TOP 100 CITIES                       2012 Top 100 Global Services Desti...
69                                          EXPERTSThe Case for Nearshoring: Why and How the New Normalwill shift Sourcing...
the top 100 citiesn	   2012 Top 100 Global Services Destinations ............. 12n	   Key Insights ..........................
1212                                                                E X P E R T S                        2012 Top 100     ...
The	Top	100	Cities                                                                                                   13201...
14       KEy INSIghTS        City, not Country:	Location	assessment	based	on	country	selection	is	a	good	starting	     poi...
The	Top	100	Cities                                                                                                        ...
16                          MeThodology & coverage       Data	 for	 this	 report	 was	 collected	 using	 a	 combination	 o...
The	Top	100	Cities                                                                                              17The	foll...
18                                              Country Snapshot :                                                        ...
The	Top	100	Cities                                                                                                        ...
20                                      Country Snapshot :                                                         Latin  ...
The Top 100 Cities                                                                                                        ...
22City Profile                         Bogota               B                        aogotá, considered a rising star in L...
The Top 100 Cities                                                                                                        ...
COUNTRY-IN-FOCUS Ensuring Global Visibility A special feature for countries to showcase their uniqueness There are numerou...
Why Jordan?                                       •  Jordan  also  possesses             with  high  quality  residential ...
•  European          Free  Trade                                         Association: Entered into force in               ...
•  Today, more than 29,000 for-        tious  initiative  led  by  Majesty eign  students  are  enrolled  in      King  Ab...
Shared ServiceS center:outSourcing:                                      •  Alongside  lower  costs,  western  •  With  it...
regional dynamicsn AsiA   30    n EuropE       40              n MiddlE EAst & AfricA   45                     n lAtin AME...
30     Asia - Balancing the Weight     of the Western World     Sourabh Chandra Pushp       T     he	 dynamics	 between	 v...
31“   The potential demand for Chinese  services is very strong due to three  important factors besides simple            ...
32     competitiveness	 of	 suppliers/service	              IT Spend IS GrowInG AcroSS The     providers,	language	profici...
3312%,	 respectively.	 India	 scores	 next	 at	        destination.	 	 While	 the	 cost	 advantage	around	 9%.	 Asian	 eco...
34     become	 a	 leading	 sourcing	 destination	           BPO	services.	According	to	him,	a	gen-     for	services.	Altho...
35IndIA AdvAnTAGe conTInueS                            The phIlIppIneS• Cost-Effective Services:	 The	 number	            ...
36        The	 Philippines	 are	 a	 prime	 loca-              According	to	Marife	Zamora,	Managing	     tion	for	BPO	servi...
37Most	 Filipinos	 can	 commu-nicate	 well,	 written	 or	 oral,	in	the	English	language,	and	can	be	trained	to	do	better. ...
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Destinations Compendium 2011

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The one stop resource on global outsourcing destinations. The destinations compendium 2011 brings together the myriad dynamics of outsourcing locations in one place complete with research, data, and expert opinions.

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Destinations Compendium 2011

  1. 1. Hangzhou, China A City of Financial Delivery Center Demonstration City of Chinasourcing Hangzhou Hangzhou is defined as the “China Service Outsourcing Demonstration City” in February 2009. Hangzhou is also one of the 21 software industry base cities in mainland China. It has currently formed the several industries including telecommunication, software, integrated circuit, digital TV, animation games and E-commerce.The revenue of software business in Hangzhou was achieved at 47 billion RMB in 2009, the software export revenue reached at 460million USD. There were total 112 enterprises passed CMMCMI, ISO27001 certification. There were 20 IT software enterpriseshave list on public market, two companies ranked at Top 10 of self-brand software products, total 15 enterprises have list at the key software enterprises name list of the national strategic planning. In order to accelerate the development of outsourcing industry, Hangzhou Municipal Government set up the leading team to draw up the development plan, issue the supporting policy to make the rapid development of outsourcing industry in Hangzhou. The total delivered amount of offshore outsourcing business reached at 919mllion US Dollars, risen to 352% compared to the same period of last year (2008).Hangzhou government has put more focus on the financial service outsourcing that is considered as the medium and high end outsourcing industry, Hangzhou now is creating to become the financial delivery center. For more details, please click: http://www.great-idea.com.cn/hangzhou/hhtz.htm http://www.great-idea.com.cn/hangzhou/ International Financial Outsourcing Center Planner & Organizer: Great-Idea Business International Outsourcing Promotion Center
  2. 2. 2011 the West Lake, Enlightenment and Discussion Discovery, Transformation, Reaction, Share To Combine the Global Resources and Facilitate theIntegration & Improvement of Global Service CapabilityFor Your Attention International Outsourcing Business Development Summit Date: October 24-26, 2011 Venue: Zhejiang Narada Grand Hotel, China Sponsors: Ministry of Commerce of the People’s Republic of China Ministry of Industry and Information Technology of the People’s Republic of China Ministry of Education of the People’s Republic of China Host City : Hangzhou People’s Government Official Promotion: Hangzhou Municipal Foreign Trade & Economic Cooperation Bureau International Financial Outsourcing Center Contact: Tel-8610 85863613 Fax-8610 59081093 Email-salida-liu@great-idea.com.cn
  3. 3. Global ServiceS A CYBERMEDIA PuBlICAtIonAn integrated media platform which connects the Pradeep Guptavarious constituents of the global technology and Chairman & Managing Director business processing services industry ecosystem. Cyber Media (India) Ltd. E. Abraham MathewDirectory of ServiceS President Ed nairNewSletter Editor ed@cybermedia.co.inA regular digest of key industry happenings. Satish GuptaDiGital MaGaziNe Head of Sales and Marketing satishg@cybermedia.co.inThe monthly digital magazine features researchreports, articles and experts’ views. Available on Smriti Sharmawww.globalservicesmedia.com smritis@cybermedia.co.in Smita VasudevanwebiNarS smitav@cybermedia.co.inGlobal Services’ web-based seminars aim to Sourabh Chandra Pushpimpart useful information related to outsourcing sourabhc@cybermedia.co.inindustry in the form of presentations and discus- niketa Chauhansions by industry specialists. niketac@cybermedia.co.in Gary BindrareSearch Manager International SalesWe deliver indepth analysis and research reports gurdeepb@cybermedia.co.inon sourcing subjects. Rahul Randhawa Manager International SalesMicroSiteS rahulr@cybermedia.co.inOnline resource center designed to provide Global Servicesfocused content on special subjects to the out- Cyber Media (India) Ltd.sourcing community. CyberHouse, B- 35, Sector 32 Gurgaon-122001, IndiaeveNtS Tel: +911 24 4822222 Fax: +911 24 2380694From multi-day, high-level, resort conferences to Contact:intimate breakfast discussions we offer a number globalservices@cybermedia.co.inof opportunities that connects the outsourcingcommunity. Disclaimer 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.
  4. 4. YOUR STRATEGICTECHNOLOGYPARTNERBuilding solutions forFinance, Telecom, IT,Automotive and Energysectors 5000+ best in class engineers 4500+ 18 offices in 11 countries Track record of building highly complex solutions Expertise in business and technology domains Focus on innovation and R&D Best-in-class processes CONTACT US: MICHAEL MINKEVICH ROMAN TRAKHTENBERG VP Technology Services Managing Director, Luxoft USA E-mail: MMinkevich@luxoft.com E-mail: RTrakhtenberg@luxoft.com Tel: +7 (495) 967-8030 x4427 Tel: +1 (212) 964 9900x 240www.luxoft.com Mobile: +7 (495) 364-9137 Mobile: +1 (917) 930-205
  5. 5. EDItoR’S notE Global City Competitiveness: Summarizing the ED Nair, Editor ed@cybermedia.co.in Dynamics T he services industry has earned the reputation of being a very respectable, environment- friendly, and economically rewarding industry amongst its many other advantages. It is no wonder that this has set off a race of sorts between countries and various cities. For buyers of services, the question ‘which place to go’ has always been crucial. The decision has direct impact on costs saved, capacity/ scale added, risks managed, and ultimately the over- all value maximized by the enterprise. What makes this game interesting is that these parameters are dynamic; sometimes they change within a year, yet in other cases, it takes years for a location to gain a pixel worth of attention on the map. Studies on locations are therefore very interesting and useful because they embody the net result of actions taken to develop a location and results obtained from these actions. This leads to the constant shifting of the order or a re-ordering of the ranks of cities that attract work in global services. Ranking of cities is becoming not only increasingly difficult but also progressively untenable in presenting a holistic view of how cities develop. Not everything can be shrunk into a number, as they say. Hence, we decided to do away with the practice of ranking cities to create the Top 100 Outsourcing Cities list and instead created a list of 100 cities that represent a threshold in service delivery. Our research partner for this year’s study is NeoGroup, the premier sourcing advisory firm that has been tracking globalization in services delivery and competitiveness of service locations for more than a decade. NeoGroup’s annual study on city competitiveness provides the main research input into this year’s Global Services Destinations Compendium. As usual, the Global Services Destinations Compendium is an attempt to bring together the myriad dynamics of outsourcing locations in one place-complete with research, data, and expert opinions. At the most granular level, we look at cities and how they compare with each other. More importantly, we look at how upwardly dynamic cities are compared to previous years. Credit is due to the cities that are featured in this issue for their sustained efforts at developing the outsourcing industry. Welcome to the Global Services Destinations Compendium 2011!
  6. 6. True Public Private Partnership Reliable Infrastructure Central LocationCommitted to Investors’ Success Investor Friendly CMMI and SPOT Certi cations Educated Human Resources
  7. 7. CoNTENTS 11 THE TOP 100 CITIES 2012 Top 100 Global Services Destinations 12 Key Insights 14 Methodology & Coverage 16 Global Cities Coverage 17 Country Snapshot: APAC 18 EMEA 19 Latin America 20 City Profile: Dalian 21 Bogota 22 Cairo 23 29 REGIONAL DYNAMICSAsia 30Europe 40Middle East & Africa 45Latin America 50North America 59
  8. 8. 69 EXPERTSThe Case for Nearshoring: Why and How the New Normalwill shift Sourcing Dynamics 70by Anupam Govil, Partner with Avasant and President of AvasenseGlobal Supply Risk Management: Monitoring and Managing GlobalSourcing & Services outsourcing Risks 76by Atul Vashistha, Chairman & CEo, Neo Group Inc.Latin America: De-risking is Becoming Ever More Criticalby Benigno (Beni) Lopez, Chief Globalization officer, Softtek 86Destination Strategy - What Makes/Breaks It? 90by Deepali Sathe, Project Manager, ValueNotes Sourcing PracticeCompete or Cooperate? Bridging the Near shore- offshore Divide 94by Lalit Dhingra, President, NIIT Technologies Inc.Choosing the Right offshoring Destination 96by LN Balaji, President of ITC InfotechDoes Captive offshoring Still Make Sense? 100by Nigel Hughes, Compass Management ConsultingAfrica Rising – outsourcing Juggernaut set Sails 103by Dr. P.K. Mukherji, President & Managing Partner, AvasantAfrica : A Ripe Terrain for Impact Sourcing 108by Pumela Salela, BPo ConsultantBusiness Transformation and the Expansion into Asia 114by Sudhir Narang, Managing Director, BT IndiaLocation Strategy For Indian Delivery Centers 117by Viral Thakker, Executive Director, Head – Shared Services and outsourcing Advisory KPMGin India and Jehil Thakkar, Executive Director Head – Global Location and Expansion ServicesAdvisory, KPMG in India
  9. 9. the top 100 citiesn 2012 Top 100 Global Services Destinations ............. 12n Key Insights ............................................................ 14n Methodology & Coverage ........................................ 16n Global Cities Coverage ............................................ 17Country Snapshot :n APAC ...................................................................... 18n EMEA ..................................................................... 19n Latin America .......................................................... 20 byCity Profile :n Dalian ..................................................................... 21 Neo Group &n Bogota .................................................................... 22 Global Servicesn Cairo ....................................................................... 23
  10. 10. 1212 E X P E R T S 2012 Top 100 Global Services Destinations Key Topics covered • Detailed profiles of 100 cities across Asia Pacific, Europe, Middle East, and Africa, and Central and Latin America • Key outsourcing services from each city • Current and future attractiveness of cities • Established, emerging, and nascent locations by outsourcing service functions • Data on annual graduate pool, IT and BPO workforce, industry size, attrition etc for each city • Recommendations on location strategy and evaluation http://microsites.globalservicesmedia.com/destinations2011 Destinations Compendium 2011
  11. 11. The Top 100 Cities 132012 Top 100Global Services DestinationsO rganizations continue to adopt outsourcing as a business strategy and an effective optimization and transformation lever to help them mitigate the current financial and competitive challenges. As a consequence of increased adoption of outsourcing, the global sourcing landscape has been undergoing changes and many global locations are evolving to serve specific needs of organizations that embark on their globalization journey or evolve as mature globalizers. Global sourcing is mainstream. While cost containment will continue to be an important factor in the global sourcing decisions of organizations, other factors such as access to a global talent pool, new market entry, and geographic risk diversifica-tion have become increasingly important. The cities covered in this report are by no means an exhaustive set of potential destinations. New destinations are constantly emerging in the global marketplace. This report attempts to provide its readers a view of the changing landscape across the more established as well as emerging destinations. We hope this report will provide you with insights as you consider and evaluate options as part of your organization’s location strategy. This report analyzes a mix of established as well as emerging and nascent out-sourcing destinations. The report covers over 100 cities across 50 countries. While traditional and preferred outsourcing destinations have been the focus of attention for over a decade, this report provides a perspective of many other locations that possess a strong potential to emerge as successful global sourcing destinations in future. The complete report will be available in November 2011 at www.neogroup.comand www.globalservicesmedia.com http://microsites.globalservicesmedia.com/destinations2011 Destinations Compendium 2011
  12. 12. 14 KEy INSIghTS City, not Country: Location assessment based on country selection is a good starting point, but cannot be the basis for an organization to set up operations. Certain macro fac- tors such as currency and risk perception are the same across the country. However, sev- eral important criteria for location assessment such as quality and availability of labor, taxes and other incentives can vary significantly across cities within the same country. Assessing organizational determinants and mapping them against market determinants, at a city level would be the recommended approach. Country based assessments, often tend to overlook organization specific requirements. The Changing Landscape: Global outsourcing destinations can be categorized as established, emerging, and nascent, based on the maturity of locations. While estab- lished locations have inherent challenges of higher costs and sustainability, they are still the most optimal fit for mature and advanced globalization activities. Tier-II and Tier-III global cities are gaining increased attention where organizations are keen on leveraging an early mover advantage. With the migration of talent becoming a com- mon global phenomenon, such low cost cities are well placed to offer their competitive advantages. Expansion of global Sourcing: Several factors are resulting in the expansion of the global sourcing landscape. IT and BPO service providers are expanding their global delivery capabilities beyond the established hubs such as Bangalore, Manila, Warsaw, Shanghai, etc in order to access new sources of talent, overcome the fight for talent in established locations, preserve their margins by going to lower cost locations as well as have the first mover advantage and be the employer of choice. Margin preservation, a re- look at core competence, gaining an early mover advantage, revenue preservation, mul- ti-lingual requirements to address global markets are few drivers adopted by matured globalizers that continue to expand the global sourcing landscape. This expansion is http://microsites.globalservicesmedia.com/destinations2011 Destinations Compendium 2011
  13. 13. The Top 100 Cities 15taking place not only in cities in newer geographies but also in Tier-II cities in countries such as India, China, Philippines, and Poland. Governments and local administrations are also wooing investors via incentives as well as through the development of business and human resource infrastructure to promote their locations. Finally, as established destinations evolve in terms of service maturity and complexity of services offered, newer cities will emerge to fill in the void and become attractive from a cost and capa-bility perspective for less complex skills. Scale vs. Niche: An important consideration for companies establishing their delivery centers is also to consider their headcount requirements. The choice of a city for set-ting up a large delivery center with headcount in thousands is fundamentally different from a requirement for resource headcount of a few hundred or less. Few countries and specifically, few cities offer a viable opportunity to scale operations. Cities in populous countries such as Brazil, China, India, Poland or the Philippines stand out for such requirements. Even within these countries, scalability issues vary by city. While estab-lished cities such as Sao Paulo, Manila or Warsaw may offer limited scalability for a company in today’s environment, emerging cities in these countries such as Campinas, Cebu, Łód or Pozna may be more viable alternatives. While ‘nascent’ cities with limited activity look attractive, companies should consider the potential supply shocks that may result with rapid, large scale expansion and increased wage and cost pressures. For many matured globalizers that target global markets, multilingual requirements and offshoring advanced and core activities of business functions have become key require-ments to sustain competitive advantage. Such organizations have a unique requirement of combination of scale and niche skills which mostly can be supported by established and matured outsourcing destinations. Leading product development firms and profes-sional services firms are good examples of such matured globalizers. Role of government Support and Incentives: The success of the IT and BPO sectors in employment generation in the economy, increased standards of living, contribution to the region’s exports, GDP growth as well as a diversification to a service oriented economy is abundantly clear. Success stories of countries such as India, China, and Philippines have made governments and local administration in other regions realize the tremendous potential and accompanying benefits. In order to wean potential inves-tors, incentives in the form of corporate and income tax holidays, subsidized or free land grants, lower customs and export duties, fast-track, single window regulatory clearances as well as incentives for training and recruitment are provided. While the nature and basket of incentives offered varies across cities, it is a common theme that runs across the cities that we have covered in this report. Companies that are early or first movers are the biggest beneficiaries of government incentives, as the local administration is keen to develop an initial set of success stories that can be used to effectively market the region to attract further investment in future. The role of government in identifying the ICT sector as a strategic growth area and channelizing planning efforts are critical success factors for a location’s attractiveness. http://microsites.globalservicesmedia.com/destinations2011 Destinations Compendium 2011
  14. 14. 16 MeThodology & coverage Data for this report was collected using a combination of primary and secondary research. Neo Group contacted outsourcing industry associations from various countries, software technology parks, investment agencies, as well as service providers across 50 countries covered in this report. The data gathered was qualitatively analyzed using Neo Advisory’s proprietary location assessment framework. Leveraging our experience on location assessment engagements by working with our clients, the research focuses broadly on eight categories that are critical to be analyzed while choosing a location. Location Factors Key Parameters Macro - Economic FDI, inflation rate, GDP growth rate and contribution to Attractiveness service sectors Financial Attractiveness Real estate rent, support cost, corporate tax rates, labor cost, wages inflation, cost to start business, tax incentives, travel cost Geopolitical Attractiveness Political stability, natural disaster, terrorism, rapes rate, City Murder rate etc Industry Maturity Size of industry, presence of major IT & BPO companies, multilingual capability, key services, industry specific services and focus Human Resource Size of workforce, university graduates output, attrition Attractiveness rate, scalability, sustainability, language proficiency Infrastructure Attractiveness Number of ISPs, personnel computers, Internet users, Fixed Internet subscribers, number of IT parks and SEZs, airline connectivity, road infrastructure, power supply Business Environment Procedures Required to Start a Business, Time Required Attractiveness to Start a Business, Procedures Required to Register a Property, Time Required to Register a Property, Procedures Required to Enforce a Contract, Time Required to Enforce a Contract, Lodging availability, Hotel Room Occupancy Rates, Cultural compatibility for expats, Cost of Living, Risk & safety for expats, Environmental Pollution levels, Ease of travel such as frequency of flight and travel times to U.S, Europe, Australia, Japan etc Risk Overview Security, Political, Government, Legal & regulatory, Macroeconomic, Foreign trade & payments, Financial, Tax policy, Labor market, Infrastructure http://microsites.globalservicesmedia.com/destinations2011 Destinations Compendium 2011
  15. 15. The Top 100 Cities 17The following is the list of cities covered in this report under respective regions: Global Cities Coverage APAC: EMEA: AMERICA: 1. Bacolod City 1. Alexandria 1. Barranquilla 2. Bangalore 2. Amman 2. Brasília 3. Bangkok 3. Belgrade 3. Buenos Aires 4. Beijing 4. Bratislava 4. Calgary 5. Bhubaneswar 5. Brno 5. Cali 6. Chandigarh 6. Bucharest 6. Campinas 7. Chengdu 7. Budapest 7. Cordoba 8. Chennai 8. Cairo 8. Curitiba 9. Coimbatore 9. Cape Town 9. Guadalajara 10. Colombo 10. Casablanca 10. Guatemala City 11. Dalian 11. Dubai 11. Kingston 12. Davao 12. Dublin 12. Lima 13. Delhi NCR 13. Durban 13. Managua 14. Guangzhou 14. Irbid 14. Medellin 15. Hangzhou 15. Jerusalem 15. Mexico City 16. Hanoi 16. Johannesburg 16. Monterrey 17. Ho Chi Minh City 17. Kharkov 17. Montevideo 18. Hyderabad 18. Kiev 18. Queretaro 19. Jaipur 19. Kosice 19. Rio De Janeiro 20. Jakarta 20. Krakow 20. San Jose 21. Jinan 21. Ljubljana 21. San Pedro de Sula 22. Johor CyberPort 22. Lodz 22. San Salvador 23. Kabul 23. Lusaka 23. Santiago 24. Klang Valley 24. Lviv 24. Sao Paulo 25. Kolkata 25. Minsk 25. Toronto 26. Metro Cebu 26. Moscow 26. Valparaíso 27. Metro Manila 27. Nairobi 28. Mumbai 28. Nizhniy Novgorod 29. Nanjing 29. Novosibirsk 30. Pasig City 30. Port Louis 31. Penang Cybercity 31. Poznan 32. Pune 32. Prague 33. Shanghai 33. Riga 34. Shenzhen 34. Sofia 35. Thiruvananthapuram 35. St. Petersburg 36. Xian 36. Tallinn 37. Valletta 38. Vilnius 39. Warsawhttp://microsites.globalservicesmedia.com/destinations2011 Destinations Compendium 2011
  16. 16. 18 Country Snapshot : APAc Cities in this region continue to offer the highest cost saving among all the outsourcing destinations covered in this report. The average ITO and BPO salaries in APAC cities are much lower compared to wages in Latin America and EMEA region. The universities and colleges generate a large, qualified labor force that is highly scalable to meet the demands of the industry. The skill sets of the labor pool available in the region are well suited to support BPO and ITO services including knowledge services. One of the barriers is the cultural and time zone difference with the western countries. The United States, Western Europe, United Kingdom, and Japan are the key demand markets. The United States accounts for approximately 70 percent of the total outsourcing revenue of the region while Chinese cities such as Dalian, Beijing, and Shanghai focus on the Japanese market due to the lingual capability and proximity. It is estimated that around 60 percent of the Chinese o u t s o u r c i n g revenue is from the Japanese market. While the region’s focus has been on the U.S. market, the suppliers in the region are gradually diversifying their risk by focusing on other demand markets such as continental Europe and United Kingdom. This has been evident in the changing revenue mix of the region over the last few years. The APAC outsourcing business is dominated mainly by banking, financial services, insurance (BFSI), and telecommunication sectors. It is also forecast that the BPO market size in Asia Pacific will reach 17.47 billion by end of 2015 with a growth rate of 15% in the emerging countries such as India, China, and South Korea. http://microsites.globalservicesmedia.com/destinations2011 Destinations Compendium 2011
  17. 17. The Top 100 Cities 19Country Snapshot : eMeA The EMEA region has seen a surge in outsourcing activity traction in the last few years. This traction is attributed to multiple reasons. Cultural and geographic proximity to European markets, availability of relatively low cost skilled workforce in regions like Eastern Europe, Russia, and North Africa, and most importantly, a sizeable workforce that can meet and support the multi-lingual requirements of global organizations are the key drivers for outsourcing traction in the region. The region has a highly efficient school system that adds thousands of skilled labor every year to its workforce. Focus on advanced science and engineering, specifically in Russia and Eastern Europe has led to the creation of global centers of engineering and technology excellence in this region. They have a huge technical potential because of their level of western world comprehension bolstered by their educational system. Middle East has been a source of attraction for the outsourcing industry in the recent past. North African locations like Casablanca and Cairo offer excellent multi- lingual skills at low cost. North and East Coast Africa have good telecommunications connectivity and thus more traction is seen in these regions within Africa. MENA region is expected to witness a CAGR of 8% during the forecast period of 2009- 2016; even UAE outsourcing market will record a CAGR of 10% during the same period. http://microsites.globalservicesmedia.com/destinations2011 Destinations Compendium 2011
  18. 18. 20 Country Snapshot : Latin America Presence of huge Spanish speaking population in the U.S. and Latin America has led to the growth of Central and Latam region’s outsourcing industry. With sizeable and moderately scalable bi-lingual population along with skill sets to support few European languages, the Central and Latam region has captured a prominent space in the global outsourcing landscape. Positioned in a similar time zone and geographically close to the U.S. market has made Central and Latam region the most favored nearshore destination for the U.S. Central and Latam region is unique in terms of its cultural orientation. Being close to the U.S. and with large historic European settlements, the region is culturally oriented to both the demand markets. Similar time zone is another advantage that cities in Central and Latin America possess in the global outsourcing market. Due to geographic proximity, travel time to Central and Latin American cities from the U.S. is very less when compared to offshore locations. One of the main advantages of Central and Latin America is the ability to offer real-time services. Outsourcing in Latin America is the fastest growing region in the world. The BPO market size in Latin America is forecasted to reach US$ 18 billion by 2012, which contributes to about 4% of the global BPO market. http://microsites.globalservicesmedia.com/destinations2011 Destinations Compendium 2011
  19. 19. The Top 100 Cities 21 City Profile DalianD alian is known as the ‘Model City’ of Chi- Country China na, and a showcase of how China is at- Population 6.2 Million tempting to transform from being just alow cost producer to a high technology, knowledge Annual Graduate Pool 94,500based economy. Located in the North Eastern corner IT Labor Pool Size 95,700of China, its geographical proximity to Japan and cul- BPO Labor Pool Size 38,500tural affinity have resulted in the city cornering mostof the Japanese market for outsourcing. 80 percent of Call Center (Japanese,Dalian’s software exports are destined to Japan. Hav- Korean, Chinese), Embedded Software,ing cornered this market, Dalian in the past few years Key Services Engineering Services, F&Ahas been looking to the West, primarily the U.S. and BPO, IT Services, SystemsEuropean markets to make inroads in the outsourcing Integration, Technicalsector. Helpdesk The city’s combined IT and BPO projected rev- Current Futureenue in 2010 was US 3.9 billion, with exports of US Attractiveness Attractiveness842 million, accounting for one-third of the country’soutsourcing revenue. It is anticipated that both theIT and BPO industry in the city will grow at over 35percent annually for the next three years. Dalian is home to approximately 300 scientificresearch institutions that produce 94,500 graduatesand 25,000 technical graduates annually with an ad-ditional 8,600 students with reasonable Japanese-lan-guage skills. Currently, the city employs approximate-ly 95, 700 in the IT industry. The Dalian Instituteof Foreign Languages provides training in English,Japanese, Korean and other foreign languages to ca-ter to the requirements of the call center industry.Neusoft Institute of Information Technology is oneof China’s largest IT institutes. Despite the presenceof these and other institutes, Dalian faces challengesin access to labor supply due to the rapid growth it iswitnessing.http://microsites.globalservicesmedia.com/destinations2011 Destinations Compendium 2011
  20. 20. 22City Profile Bogota B aogotá, considered a rising star in Latin Amer- Country Colombia ica for services offshoring is the commercial Population 7.8 Million and cultural capital of Colombia. Once per- Annual Graduate Pool 67,000 ceived to be unsafe, the country has, in recent years IT Labor Pool Size 20,000 transformed itself as one of the best locations to do business in Latin America, ranking higher than coun- BPO Labor Pool Size 35,000 tries such as Brazil, Chile, and Mexico. Contact Center (Spanish, Key Services Bogotá has a good educational system that produc- Limited English), IT Services es qualified talent to meet the demands of the grow- ing industry for various business activities related Current Future to offshore services. The city is home to more than Attractiveness Attractiveness 107 higher educational institutions that produce ap- proximately 67,000 graduates every year, of which, 17,000 are technical graduates. At present, the BPO and IT industry in the city has a combined work- force of 50,000, of which approximately 80 percent is employed in servicing the domestic market and 20 percent services the export oriented markets, primar- ily across Latin America and Spain followed by the United States. 80 percent of Colombia’s contact center indus- try is located in Bogotá and generates 60 percent of the overall revenue. Bogotá’s outsourcing revenue in 2010 was about USD 582.162 Million, of which 82 Million is from exports. Bogotá is well suited for setting up contact center operations to service the Spanish speaking markets in the United States, Spain, and Latin America. http://microsites.globalservicesmedia.com/destinations2011 Destinations Compendium 2011
  21. 21. The Top 100 Cities 23 City Profile CairoT he city of Cairo is the educational hub of Country Egypt Egypt as well as for MENA (Middle East and Population 17 Million North Africa) region. The government is ea-ger to attract and support foreign investments to de- Annual Graduate Pool 30,000velop the ICT sector and provides several incentives IT Labor Pool Size 28,400to investors. Incentives include beneficial purchase BPO Labor Pool Size 11,600options for municipally owned land and tax exemp-tions to companies setting up operations. Embedded Software , IT Services, Medical The recent event in Egypt doesn’t stop the growth Transcription, Multilingual Key Services Call Center, Productof outsourcing industry in Cairo. Example: - Teleper- Development, Softwareformance has no intention to reduce its investment in Testingthe country; instead the company increases its man-power from 1,100 in January 2011 to 1,700 in May Current Future2011. Attractiveness Attractiveness Cairo serves not only the Middle East and Afri-can markets but is increasingly becoming a hub forserving the IT and BPO requirements for Europeancountries such as Spain, United Kingdom, etc. A keyenabler is the availability of a multi-lingual skilledworkforce fluent in Arabic, English, Spanish, Ger-man, and French. It is estimated that the IT and BPOsectors employ 40,000 people at present. The government is also developing a BPO Park at Cairo international airport is the second busiest Maadi in the south-east of Cairo, which is going toairport in Africa with air connectivity to various parts be operationally ready 2012.of the world. The government is investing heavily toupgrade the existing telecommunication systems and Application development, testing and technicalpower supply to keep pace with the growing demand. support, product development, contact center ser- vices, and medical transcription are the main services The Smart Village, a public-private investment being outsourced from Cairo.partnership was set up in 2001 to attract investmentand serve as a cluster for IT and business services. Cairo is well positioned to grow as an importantSeveral multinationals have already set up their cap- global sourcing destination for serving the MENA astives and global delivery centers in the Smart Village. well as European and U.S. markets.http://microsites.globalservicesmedia.com/destinations2011 Destinations Compendium 2011
  22. 22. 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
  23. 23. Why Jordan? •  Jordan  also  possesses  with  high  quality  residential  a  modern  and  progressive  developments,  and  a  vast  society.  Jordan  is  known  for  array  of  dining  entertainment  its  economic  and  political  and  leisure  opportunities  for  stability,  and  for  a  multi- residents, workers, visitors and •  True  Public-private  partner- cultural  society,  marking  it  as  touristsship:  A  model  that  has  been  an  attractive  destination  for  •  Irbid  Development  Area: proven  to  be  a  success;  The  foreign  nationals  to  work  and  Located in Jordan’s fertile north Government  and  the  private  reside adjacent  to  the  kingdom’s sector  have  committed  to developing  the  required  infra- •  Two  cities;  Amman  and  leading  scientific  institutions structure,  attractive  incen- Irbid  have  emerged  as  the  and  one  of  the  Middle  East’s tives  and  training  initiatives  to  outsourcing  Cities  due  to  foremost  ICT  and  health  care ensure  a  constant  supply  of  the  strong  infrastructure  and  universities, and stretched over skilled manpower talented workforce: a  3.2  km2  area,  20Km  east  of •  A central location to support  •  Business Park Development  Irbid  city  and  80km  north  of a  regional  hub  and  spoken  Area  in  Amman-Dabouq:  the Jordanian capital Ammandelivery  model;  with  many businesses  looking  to  expand beyond the traditional markets, Jordan  offers  a  unique  market to  tap  to  the  growing  MENA region. At a short flying distance from  the  GCC  countries,  North Africa, Central Asia, and Europe, Jordan  provides  an  easily accessible  location  from  which to support multiple regions•  Jordanian  companies  now have  CMMI  and  SPOT  certifi-cations;  Certificates  that  are the  best  internationally  and are  considered  an  asset  to  any  Located  in  an  outstanding  •  Time Zone: 2-3 hourscompany city  location  on  Amman’s  ahead of Greenwich timing•  A  young,  growing,  and  in Winter and Summer times main  corridor  with  quick educated talent pool providing  respectively. Countries with- access  to  all  city  amenities, a good source of man power Business  Park  Development  in one time zone include•  Investor-friendly  regula- Area  is  destined  to  become  those in Eastern Europe andtions  that  do  not  require  local  a  sustainable  and  enduring  GCC countriesbusiness partners, Jordan does  mixed-use  city  district  that  •  Population: 6.5 Millionnot  have  any  foreign  owner- will provide future growth and  •  For more informationship/repatriations  restrictions  development  for  Amman  and  on Jordans country profileor  localization  policies  thus  Jordan.  It  offers  international    please log on togiving flexibility standard  office  environments  http://tiny.cc/0ptth Advertorial Advertorialwww.globalservicesmedia.com Destinations Compendium 2011
  24. 24. •  European  Free  Trade  Association: Entered into force in  January  2002,  it  aims  at  setting  up  a  fully  operational  free  trade  area over a period of 120 years •  AGADIR:  Entered  into  force  on  July  6  2006,  the  agreement  allows  for  diagonal  accumula- tion of origin amongst its mem- •  Roads:  Jordan  has  a  well  ber countries developed road network allow- •  Joining  the  GCC  council  ing  quick  access  to  all  its  terri-Stable environment, trade membership  is  in  negotiation  torylinkageS & agreementS •  Electric Energy: Reliable and  phase amongst others•  Sound  macroeconomic  competitively  priced,  electric-management,  prudent  fis- general infraStructure ity  in  Jordan  is  generated  by cal  and  monetary  policies  and  •  Three  Airports:  Queen  Alia sustained  structural  reforms  the  Jordanian  Electric  Power  International  Airport  (Amman) including legislative, regulatory,  which  was  recently  expanded  Company (JEPCO). Government and  judicial  reforms  have  posi- to  serve  9  million  passengers.  direction is also geared towards tioned  Jordan  as  an  ideal  base  increasing the use of renewable for export-led growth to region- energy sourcesal and international markets•  The  Kingdom  consistently  education & Workforceranks  among  the  safest  loca- •  Named  as  the  MENA  region’s tions  for  business  in  the  world  top performer in the field of edu-and among Arab nations, in par- cation  reform,  Jordan  has  been ticular•  Jordan  is  committed  to freedom  of  expression  and choice. Measured by the Annual Freedom  House  Survey,  Jordan ranks fourth in the region•  An  array  of  international trade  agreements  for  foreign direct investment and export:•  USA-JUSFTA:  Has  been  in force since 2001. It was the first free  trade  agreement  negoti- pushing towards attaining highest ated  by  the  US  with  an  Arab  King  Hussein  International  international standards of qualitycountry, and the fourth with any  •  Jordan  has  a  literacy  rate  of  Airport  (Aqaba)  and  Amman country in the world  91%•  GAFTA: Establishment of the  Civil Airport at Marka for mostly  domestic  and  nearby  interna- •  70%  of  the  population  age Arab free trade zone by January  tional routes demographic  is  under  the  age 2005  •  Seaport:  The  Gulf  of  Aqaba  of 30, denoting a youthful pop-•  Jordan –EU Association Agree-ment:  Came  into  force  in  2002,  ulation,  ideally  suited  for  ITO  on  the  Red  Sea  is  deep  water the  agreement  aims  at  creating  and BPO jobs harbor which offers facilities for a  free  trade  agreement  by  end  •  Females  comprise  51%  in  general  cargo,  containerized of 2010 under graduate studies cargo and specialized cargo •  26  state  and  private  accred-•  Singapore:  Signed  in  May 2004;  The  agreement  aims  at  •  Railroad: There is a new rail- ited universitiesthe  gradual  elimination  of  cus- way master plan to improve and  •  Over  40  institutions produc-tom  duties  over  a  period  of  10  increase  the  existing  620  km  ing highly skilled techniciansyears long rail network Advertorialwww.globalservicesmedia.com Destinations Compendium 2011
  25. 25. •  Today, more than 29,000 for- tious  initiative  led  by  Majesty eign  students  are  enrolled  in  King  Abdullah  was  launched, Jordanian Universities creating  development  zones •  Areas of study with the high- across  the  Kingdom  that  pro-est enrollment include Business  vide  investors  with  a  globally Administration,  Engineering,  competitive  combination  of Computer Sciences, Humanities,  location,  infrastructure,  and Education and Teacher Training,  services  and  labor.  The  DFZC’s and Medical Services vision  supported  by  a  highly •  Jordan’s workforce is regard- qualified  team  that  works  in  •  The  National  ICT  strategy ed as one of the most qualified,  partnership  with  the  develop- serves  2  basic  goals.  First,  it competitive  and  productive  in  ment zones master developers;  identifies  the  ICT  sub-sectors the region charged  with  managing  the  best-suited  for  growth  given •  Jordan’s  labor  rates  are  con- buildings,  development  and  the  environment  in  Jordan. siderably  cheaper  than  those  operation of the zones. To date,  Thus,  the  strategy  challenge  to in other countries in the Middle  six  development  zones  are  which  the  private  sector  in  the East currently  operational,  offering  country  must  respond.  Second, •  Labor  force  specialties  diversified investment opportu- it  defines  actions  the  govern-include:  information  technol- nities that build on each zone’s  ment must take to do its part to ogy, engineering services, travel  competitive advantageand tourism, textile production,  facilitate ICT sector growth •  benefits to foreign inves-natural  resource  extraction,  tors:  •  As  a  result  of  implement-pharmaceuticals and light man- •  Foreign ownership 100% ing  these  strategies,  annual ufacturing •  Foreign employment  ICT  sector  revenues  increased  •  One  Stop  Shop:  One-Stop  by  an  average  of  25%  yea-on-commitment to year    over  the  past  few  years inveStorS’ SucceSS Shop  services  to  streamline  and ease the process of estab- and  generated  income  repre- lishing an operation within the  senting  approximately  14%  Business  Park.  Investors  will  of  the  country’s  GDP,  adding  be  able  to  avail  of  these  fast  over  15,000  jobs  directly  to  track  facilities  for  all  services  the  economy  and  more  than  ranging  from  Registration  to  80,000  jobs  overall  whether  Licensing,  Visas  and  Customs  direct, indirect or induced formalities •  Jordanian  telecoms  have  •  Tax  and  free  related  incen- invested  over  USD  400  million  tives and exemptions  in  recent  years  in  a  number  of •  Jordan  Investment  Board:  •  Exemption  from  sales  tax  technology  solutions  designed A  government  institution  and custom duties to  make  Jordan  more  acces-committed  to  working  with the  private  sector  to  promote  •  As  a  result,  Foreign  Direct  sible  to  the  rest  of  the  world Jordan  for  its  unique  and  busi- Investment  (FDI)  surged  from  •  Opportunities in Jordan’s tel-ness  friendly  environment  and  USD  937  million  in  2004  to  ecom revenue reached USD 3.1 diverse  investment  opportuni- around USD 2.4 billion in 2009 billion, up from USD 673 million ties. The JIB presents state of the  ict in 2001art  services  for  facilitating  reg- •  In  response  to  a  challenge istration  and  licensing  proce- put  forward  by  His  Majesty  in dures for projects, and offers all  1999,  the  efforts  were  direct-possible  simplified  procedures  ed  at  devising  a  comprehen-for investment sive  framework  for  Jordan’s  ICT •  Development  and  Free  sector,  which  resulted  in  many Zones  Commission:  An  ambi- strategies Advertorialwww.globalservicesmedia.com Destinations Compendium 2011
  26. 26. Shared ServiceS center:outSourcing: •  Alongside  lower  costs,  western  •  With  its  strategic  location  as  a Jordan  specialties  in  outsourcing    style legal system, strong IPR laws and  gateway  into  the  MENA  region,  its lies in: a business friendly climate, Jordan has  good  international  connectivity,  lower  been  positioned  as  an  important  IT  costs,  and  world  class  infrastructure, buSineSS ProceSS outsourcing destination  Jordan can be the ideal destination for outSourcing (bPo): •  Many  multinationals  as  well  as  shared services centers •  BPO  requires  expertise  in  key  local firms have capitalized ion Jordan’s  •  As  a  BPO  hub  for  MENA  region, business  functions  like  finance  and  rich  source  of  talent  and  aptitude  for  Jordan  can  be  the  decisive  choice  for accounting,  human  resources,  claims  sophisticated  IT  skills  by  establishing  establishing regional headquarters and processing,  and  customer  relationship  outsourcing operations shared services infrastructure manager •  Current capabilities in Jordan range •  With  its  higher  literacy  rate,  lower  from outsourced software development  •  A  supportive  government  and cost,  and  highly  trainable  ICT  savvy  best  in  class  incentives  offer  an  ideal  and  testing  to  remote  infrastructure  launch pad for multinationals that can workforce,  Jordan  is  ideally  suited  to  management  to  providing  technical provide such services  leverage Jordan’s strong workforce and  assistance on sophisticate products  cost to their advantage to further their •  Jordan’s  familarity  with  the  •  Leading  tech  companies  such  as  global diversification strategyAmerican,  British,  Asian,  as  well  Cisco,  Microsoft,  Oracle,  HP,  Google as  Middle  East  business  practices  and  others  have  established  centers  contact centerS: positions it well to serve all continents  of excellence in Jordan to tap into the  •  Jordan  has  a  natural  affinity •  Global service providers have been  country’s ICT advantage to  become  a  strong  contact  center active  in  Jordan  and  are  using  it  as  a  outsourcing  hub  owing  to  a  highly  knoWledge ProceSSbase  to  serve  its  regional  as  well  as  service  oriented  economy,  a global clients  outSourcing (kPo):  competitive  cost  structure,  a  young •  Sectors  with  good  potential  for  •  Knowledge  based  services  require  workforce and familiarity with both the outsourcing  business  processes  to  qualified  labor  force  with  specific  Western and Regional cultures Jordan  include  banking,  insurance,  expertise,  advance  knowledge,  analytical interpretation, and technical  •  With  a  relatively  neutral  English healthcare,  telecom,  hospitality  and  and  Arabic  accents,  Jordan  is  fast technology skills  emerging  as  the  most  viable  contact  •  Jordan  with  its  vast  skilled  labor  center destination in the region information technology pool will provide quick time to market outSourcing (ito): solutions  for  any  organization  and  •  Several  outsourcing  providers •  Jordan  enjoys  a  high  level  of  ICT  guarantees  a  continuous  flow  of  operate out of Jordan, offering services penetration  rate  and  a  large  number  support  that  will  ensure  continuous  to  the  US,  UK  and  the  Middle  East of ICT graduates with a strong industry  success  for  all  current  and  future  ranging  from  customer  support,  pre focused skills  business  sales  and  loyalty  management  to •  In fact Jordan has been a source of IT  •  Some  of  the  key  KPO  services  that  technical and helpdesk support talent for major local and multinational  can  be  delivered  from  Jordan  include  •  Besides  Amman  a  new  contact companies  in  the  Middle  East  and  is  financial  analytics,  technical  research,  center  hub  is  emerging  in  Irbid  to widely  recognized  as  possessing  the  Middle East specific market and business  service  growing  demand  for  cost strongest ICT workforce in the region  research functions to name the least effective and talented agentsJordan believeS itS outSourcing StrengthS lie in:•  financial services: Jordan’s banking and financial industry system is among the strongest and most developed among all  Middle  East  emerging  markets.  Internationally  recognized  firms  have  emerged  in  Jordan  to  provide  specialized  F&A services for regional and global companies•  engineering services: Jordan produces high caliber engineering talent by virtue of its highly recognized and prestigious educational system•  healthcare and pharmaceuticals: The Jordanian government is committed to promoting the life-sciences industry as one of the new growth areas in the country•  information and communications technology: Jordan’s vibrant ICT sector is the result of a fully liberalized market and a thriving private sector. The ICT industry has increasingly become the engine of growth for Jordan’s economy•  energy and renewable energy: Jordan is ripe to emerge as a Clean Technology hub within the MENA region. Strong solar  irradiance,  robust  electric  infrastructure,  abundant  engineering  talent,  and  moderate  labor  costs  are  particularly conducive to growth in the solarcontact:•  For more information and statistics :  Int@j: Tel: +962 6 5152322, info@intaj.net, www.intaj.net•  For more information and statistics on Jordans country profile, please log on to http://tiny.cc/0ptth• For more information and statistics on Jordans outsourcing profile please log on to http://tiny.cc/tvuus Advertorialwww.globalservicesmedia.com Destinations Compendium 2011
  27. 27. regional dynamicsn AsiA 30 n EuropE 40 n MiddlE EAst & AfricA 45 n lAtin AMEricA 50 n north AMEricA 59
  28. 28. 30 Asia - Balancing the Weight of the Western World Sourabh Chandra Pushp T he dynamics between various Asian outsourcing locations could best be characterized as the war multinational companies now look to BPO far more as a means to reduce costs for business operations. The outlook for BPO destinations. Apart from India, for Asia/Pacifics BPO market remains which has major scale in both IT and positive, with growth in 2011 expected BPO, the rest of Asia is more of a BPO to be 17.9 percent in terms of U.S. story. Dollars. ” The outlook for Asia/Pacifics BPO The presence of multiple city options market remains positive, with growth with significantly different character- in 2011 expected to be 17.9 percent istics drives complexity in location in terms of U.S. Dollars. According to selection decisions in Asia. There is a the latest Gartner research, the world- significant diversity in the evaluation wide BPO market is forecast to grow of the top Asian players. India, with by 6.3 per cent globally and 17.9 per its early-mover advantage, is able to cent in the Asia-Pacific during the year 2011. The study titled, Market Overview: BPO Service Providers in Country Marketplaces in Asia-Pacific and Japan,2010-2011, states that the BPO industry will grow to $1.69 billion by 2012 and $2.47 billion by 2014. H Karthik, research vice-president at Everest Research, said: "Emerging mar- kets are faring far better and, generally, http://microsites.globalservicesmedia.com/destinations2011 Destinations Compendium 2011
  29. 29. 31“ The potential demand for Chinese services is very strong due to three important factors besides simple “ Even companies in developing countries are looking to outsource BPO work. There is also a lot of de- “ Virtualisation, consolidation, and managed services that focus on ROI in the short term will drive opportu- labor arbitrage: risk diversification mand for re-engineering processes nities in the market. Emerging Asian across multiple low-cost locations, with efficiency becoming the norm. enterprises across multiple industries China’s potential labor pool, and the The emergence of newer verticals will continue to accelerate services attractiveness of China as a huge de- will also be growth drivers. spending in their efforts to challenge mand source for global products and existing global MNCs. services. — Aparup Sengupta — Som Mittal — Roopa Kudva CEO & MD, Aegis. President, NASSCOM MD and CEO, CRISILprovide manpower for all type of off- Sakshi Garg, Senior Research Analyst, shoring activities. The Philippines long Everest Group, adds, “India has retained established tradition of providing lead- its’ position as the leading global shor-ing call-center support continues to be ing destination with a 55 per cent share strong. China provides competitively of global ITO and BPO market in 2010. priced high-end analytics and engineer- Early-mover advantage in the outsourc-ing, while Malaysia attracts IT services ing industry and critical mass has made offshoring. India the most attractive global location Companies in Japan and South Korea for companies looking at outsourcing.” are looking at China to offshore their She further adds, “ There are a number IT/BPO processes-while operations in of considerations in terms of identifying Singapore are considering their neigh- a particular country as a favorable out-boring Malaysia as an attractive alter- sourcing destination, besides, the very native. Australian companies are mov- obvious cost related advantages, some ing their IT/BPO processes within the of the other considerations include: region to Indian and Philippines. availability of skilled manpower, http://microsites.globalservicesmedia.com/destinations2011 Destinations Compendium 2011
  30. 30. 32 competitiveness of suppliers/service IT Spend IS GrowInG AcroSS The providers, language proficiency, govern- reGIon ment support, educational system and The market in Asia for IT purchases infrastructure.” is growing considerably. Research firm, In another report on BPO trends Forrester expects growth to accelerate in the Asia-Pacific region, excluding over the next few years. According to Japan, research house IDC forecasts Forrester, the Asia Pacific economies the market to rise to US$15 billion by may not have the fastest growth in 2011, recording a compound annual nominal GDP in 2011, but overall, IT growth rate (CAGR) of 16 percent. In purchases in Asia will grow by 8% in support to this, research firm Ovum, 2011 and 9% in 2012 with Japan’s slow- predicts- Asia-Pacifics BPO market er growth dragging the regional growth will reach revenues of US$17.47 bil- rate down. In terms of the fastest-grow- lion in 2015, a CAGR of 9.3 per cent ing countries in the top 15 IT markets from the US$11.18 billion it hit in (in local currencies), Brazil and China 2010, predicts Ovum. will have the fastest growth at 15% and http://microsites.globalservicesmedia.com/destinations2011 Destinations Compendium 2011
  31. 31. 3312%, respectively. India scores next at destination. While the cost advantage around 9%. Asian economies occupy is unparalleled, India has the world’s four of the top five fastest-growing econ- largest pool of employable talent, serv-omies in relation to IT spend. ice delivery infrastructure across multi- ple geographically dispersed locations chIneSe drAGon vS. IndIAn Bpo within the country, and a supportive India has retained its position as the policy regime.leading global shoring destination with China, Indias immediate neighbor a 55 per cent share of global ITO and and major competitor in the region, views Indian provider growth as a major threat diplomatically. Contrary to its earlier positioning as a competitor to India, China is now hailed as being sup- plementary to India. China rules the manufacturing outsourcing space and is undoubtedly leagues ahead of any other nation but, when the conversa-BPO market in 2010. India with its first- tion turns to service outsourcing India mover advantage and deep skill base certainly is reckoned the leader. In fact, remains the unquestioned leader in the the Indian growth rate in the sourcing Asian-regional dynamics. The fact that space is expected to surpass China by India has a vast workforce and talent 2015 significantly. pool that is eager to walk the extra mile, There is significant buzz in the mar-has made them a powerful outsourcing ket that China has the potential to also “ On the supply side, China faces many seri- ous challenges such as Intellectual Property (IP) and data security concerns and the em- ployability of the workforce, which threaten fundamental growth. The Chinese govern- ment and suppliers are implementing new measures, however, to address these con- cerns. — Liu Jiren, Chairman and CEO, Neusoft Grouphttp://microsites.globalservicesmedia.com/destinations2011 Destinations Compendium 2011
  32. 32. 34 become a leading sourcing destination BPO services. According to him, a gen- for services. Although the BPO industry eration of English-speaking Chinese in China is yet to attain the maturity will surface in four years from now, witnessed in India, there is more than as they have really toiled hard during enough reason to believe the Chinese the last one decade to progress on this. dragon is inching towards that desired Although Aegis does not have a pres- level of maturity and it surely poses a ence in China till now, the company is significant threat to the Indian suprem- currently considering setting up centers acy. 2009-10 data reflects a growth of in that country. 21% in the Chinese outsourcing indus- India has been a pioneer in provid- try with a value of $23.6 billion. While ing outsourcing solutions and a range India still remains the most preferred of outsourcing services to countries outsourcing destination for companies across the globe. Outsourcing to India in the West, the scenario is different can help achieve all the above stated in the Asia-Pacific region. Most com- benefits. The kind of trust and faith panies in these regions prefer to send that companies enjoy with Indian pro- their work to China primarily due to viders is a gradual process; to break low employee costs. Hence, there is this faith is the real challenge for no doubt that China is fast emerg- China. Following are some of the prom- ing as a major outsourcing destination inent reasons why companies choose worldwide. to outsource to India and may be what Aegis-CEO, Aparup Sengupta is of the China needs to concentrate on in addi- view that China will overcome India as tion to creating a favorable market an appealing destination for non-voice environment. “ Forecasts indicate that most economies will experience a decline in GDP growth next year, with countries in Western Europe and North America growing at the slowest rates and the Asia-Pacific region continuing to outperform all others. Despite the global setback, howev- er, spending on IT software and services next year is set to increase over levels recorded in 2010. — Blanca Trevino, CEO, Softtek http://microsites.globalservicesmedia.com/destinations2011 Destinations Compendium 2011
  33. 33. 35IndIA AdvAnTAGe conTInueS The phIlIppIneS• Cost-Effective Services: The number The Philippines has become one of one reason global organizations out- the most preferred offshore destina- source to India is their cost-effective tion for call center outsourcing, spe- services. Outsourcing to India can cializing in customer support services. help you save more than half of your Like Indians, Filipinos also have a high operating costs. Having a large techni- level of English proficiency and strong cally skilled labor pool has enabled customer orientation. The Philippines India to provide cost-effective serv- have not been fueled only by traditional ices without compromising on qual- ity. Outsourcing to India can help you save on your operating costs while increasing your productivity, qual- ity and efficiency. Replacing Indian dominance in the IT services space seems to be unthinkable.• high-Quality Services: Outsourcing to India is not just a cost saving play, its transformed into an all round sat- isfying experience that saves money low-value-added call centers, but by and makes the process more robust higher-end outsourcing. Even though and standardized. Quality and process call centers still dominate the sector, excellence initiatives like Six Sigma, the Philippines has started capitalizing Lean, and others have been embed- on its non-voice processes. ded in the offerings by all promi- nent Indian providers. India has TAkInG AdvAnTAGe of The proved it is technically superior when phIlIppIneS compared to other offshore countries Many cities in the Philippines includ- providing outsourcing solutions. The ing Manila and Cebu have the infrastruc- Chinese propose to move in the same ture, the talent, and the government direction, but its a path the Indians support needed to maintain successful have pioneered. call centers. In addition, the caliber of • Other advantages: Vast talent pool, people and the level of language profi- scale, language, process maturity, ciency in these parts of the Philippines government stability, good and qual- are equal if not superior to most of the ity excellence certification. current offshore locations.http://microsites.globalservicesmedia.com/destinations2011 Destinations Compendium 2011
  34. 34. 36 The Philippines are a prime loca- According to Marife Zamora, Managing tion for BPO services because the work Director -Asia Pacific, Convergys, “As can be spread around smaller cities in the BPO market evolves, expect 90% of various provinces around the country future Philippines-BPO opportunity to which are extremely inexpensive in derive from non-voice BPO functions. terms of both human capital and infra- BPO revenue in the Philippines has structure. Both Manila and Cebu are top grown to over $8 billion, almost 50% tier cities for BPO and software devel- over the last four years, with projections opment, but it is still the early stage of showing them overtaking India as the the industry. BPO leader sometime within the next The offshore outsourcing industry in 18 months.” the Philippines is now estimated to be growing at about 30% and will reach whAT MAkeS The phIlIppIneS The $25 billion in 2012. Initially the focus preferred Bpo deSTInATIon? was on call centers and low value added First, there is great language advan- BPO, however growth over the last few tage. A huge chunk of the Philippine years has centered on higher value population is literate in English. The activities such as web design, software education system, public and private, development, animation, legal services, uses the English language as a medium medical transcription etc.. While voice- of instruction. Filipinos, even when based services constitute a bulk of the untrained, have a good grasp of the lan- BPO market currently, non-voice and guage. Moreover, more Filipinos can be back-office processes contribute 90% to easily trained to speak with an American the future market opportunity. accent or any accent the client prefers. “ Success in voice-based BPO services has made the Philippines the second larg- est low-cost BPO destination after India. Clients are now saying that there are cer- tain kinds of processes they want done out of the Philippines and some that they want back in India. — Keshav R. Murugesh, CEO, WNS http://microsites.globalservicesmedia.com/destinations2011 Destinations Compendium 2011
  35. 35. 37Most Filipinos can commu-nicate well, written or oral, in the English language, and can be trained to do better. The Philippines also has a vast human resource talent pool that can be tapped for various services. Aside from the widely growing number of qualified call center agents, a lot of Filipinos are already skilled and trained or trainable to provide medi-cal transcription services, legal services, SEO and web development services, soft-ware development, virtual assistance, and other such services. range of its closest competitors in the There is still a widely untapped pool of BPO industry. Aside from the capital talents in the Philippines which can be Metro Manila, many other cities in the utilized via outsourcing. country such as Davao City, Baguio, Another important edge of the and Cebu offer a vast pool of talent, and Philippines in terms of outsourcing is affordable office space.the country and its people’s familiar- Finally, the government is very much ity and affinity for American (US) laws supportive is providing infrastruc-and culture. The Filipinos, most having ture and money to developing human relatives or friends based in the US, and resources through education and train-being exposed to US mass media for a ing. There is also focus on improving long time, are very much well-versed in telecommunications infrastructure in US laws, situations, environment, and order to encourage businesses to invest culture. in the country’s BPO industry. The Philippines, comparatively speak- Success in voice-based BPO services ing, offers affordable human resources has made the Philippines the second larg-and office space. Furthermore, the cost est low-cost BPO destination after India. of operations in the Philippines is very A number of companies are already much affordable and well within the leveraging the Philippines for a wide http://microsites.globalservicesmedia.com/destinations2011 Destinations Compendium 2011

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