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Indian cities dominate list of top global outsourcing destinations

business Updated: Oct 20, 2009 20:44 IST
Indian cities

Six Indian cities - Bangalore, Delhi NCR, Mumbai, Chennai, Hyderabad, Pune - are among the eight top global destinations for outsourcing of services, according to a new survey released on Tuesday.

The other two are the Philippines' Manila NCR and Ireland's Dublin city, according to the 4th Global Services-Tholons Top 50 emerging outsourcing destinations survey, jointly done by Global Services from CyberMedia and Tholons, a services globalisation advisory firm.

The Next 10 Outsourcing Destinations considered to be 'Top 10 Aspirants' from a total of 68 destinations is dominated by China's Shanghai, Beijing and Shenzhen, Vietnam's Ho Chi Minh City and Hanoi, Poland's Krakow, Argentina's Buenos Aires, Egypt's Cairo and Brazil's Sao Paulo.

Avinash Vashistha, CEO of Tholons says: "For a CIO today, finding a Centre of Excellence is more than just lower cost. It must consider location, risk mitigation for business, cultural affinity and scalability of the skilled workforce."

"The service providers need to think through their offerings so as to differentiate as the competitive advantage is rapidly vanishing due to cut throat competition and market saturation," adds Vashishtha.

India continues to top the list with revenues of $40 billion in IT-BPO export services in 2008. Indian IT-BPO export services posted 35 per cent year on year growth rates in the last five years.

Interestingly India's FDI inflows posted the largest increase globally at 46 per cent in 2008 -- from $25 billion to $46 billion even as global FDI flows decreased from $1.9 trillion to $1.7 trillion and several developing economies struggled to acquire investments from client nations.

Compared to the previous year's rankings, this year's study reveals minimal shifts in rankings because of the overall slowdown in the pace of outsourcing activity in the face of global recession.

Seven Chinese cities - Shanghai, Beijing, Shenzhen, Dalian, Guangzhou, Chengdu and Tianjin - and six Indian cities - Chandigarh, Kolkata, Coimbatore, Jaipur, Bhubaneswar, Thiruvananthapuram - make it to the list of next 60 outsourcing destinations.

The study lists India, Philippines, Ireland, China and Brazil among Top 5 Offshore Nations "with a high degree of maturity and record of successful delivery capabilities."

Canada, Russia, Mexico, Vietnam, Poland are listed as Top 5 Emerging Nations. The difference between the Top 5 and the Next 5 offshore nations is most pronounced in the service level maturity, the study said.