India top offshoring destination: Report
6 Apr 2007, 0052 hrs IST,TNN
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MUMBAI: An unbeatable mix of low costs, deep technical and language skills,
mature vendors and supportive government policies have taken India to the
top among global destinations for offshoring services. And this is despite
all the concern about overheating, wage inflation and service levels, a
recent survey by AT Kearney said.
In overall ranking, dominated by the developing countries from Asia, India
is followed by China, Malaysia, Thailand and Brazil, the survey, christened
Global Services Location Index 2007 said.
To arrive at final ranking, AT Kearney surveyed over 50 countries for
different aspects related to offshoring, like people skills, financial
attractiveness and business environment. India maintains a wide, albeit
slightly shrinking, lead over China, confirming what industry surveys and
visiting executives have found, the survey said.
While compensation costs in India have risen because of the recent high
economic growth, "these cost escalations have been matched by corresponding
increases in skill supply and quality indicators," the global consultancy
major said.
India's success is also prompting developing countries to replicate its
model. While in Asia, two of its neighbours, Pakistan and Sri Lanka, have
begun to recognise the potential of the export services sector, a host of
Latin American countries too are taking the same route, the survey pointed
out.
Sri Lanka and Pakistan, which entered AT Kearney's latest index for the
first time, offer many of the same advantages as India, with similar labour
costs, widespread use of English, strong education systems and increasingly
open and well-regulated business environments.
However, both countries have only recently woken up to the enormous
opportunity of the offshore services sector and therefore lack India's
breadth and depth of experience. These two countries are also disadvantaged
by their relatively smaller population-base and obvious concerns over
internal security, the survey said.
Although India ranks high overall, because of its skilled and technically
superior pool of manpower, it suffers on the two other parameters -
financial attractiveness and business environment rankings.
In terms of people skills India ranks second, behind US (tier II cities) but
ahead of China and Germany. As per business environment rankings, India is
placed at 34th, while Singapore comes top, followed by Germany and UK. The
survey said when it comes to cost effectiveness, Vietnam, with one of the
lowest telecom costs in world, comes on top.
Source: Times of India
