India is 'star performer' in outsourcing

Wednesday, 05 May 2004, 19:30 IST   |    3 Comments
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NEW DELHI: Thanks to its booming outsourcing industry, India has again scored over China to emerge as the top offshore destination for global businesses, a study by international consultancy AT Kearney has said. "India remains the star performer in the 2004 offshore index. It once again captured the top spot by a comfortable margin due to its strong mix of low costs and significant depth in human resources," the report said. "China's vast labour pool and low costs secured it second place in the index, although it lags behind India in terms of experience and other key factors like IT and management education, language skills, concerns about intellectual property and overall country risk." Malaysia, Czech Republic and Singapore make up the next three countries on '2004 Offshore Location Attractiveness Index' that evaluated all countries based on corporate surveys, offshore experience, labour and government initiatives, and chose 25 finalists. The annual index, designed to help companies understand and compare factors that make countries attractive as potential locations for offshore services, also warns that India does face a mounting challenge to its supremacy and is vulnerable in some key areas. "Although its human assets have made India the offshore leader, it ranks below the top 10 in terms of business environment. Infrastructure weaknesses and concerns over economic stability pull India down," the report said. The lack of exposure of the nation's general population to other cultures and inability to meet expectations are cited as other reasons for its vulnerability that even made Dell and Lehman Brothers to take back their call centre jobs to the United States. Yet, the report also pointed out some interesting trends in the Indian outsourcing industry to counter such vulnerabilities, where players such as Tata Consultancy Services, Infosys Technologies and Satyam Computers have established operations in other countries. For these operations, Canada was ranked first because of its proximity to, and cultural similarities with, America, while Singapore and China were mentioned as other prime destinations for Indian outsourcers. The report said although China ranked second in the index, enjoying cost advantages and large educated labour pool, its direct business process outsourcing experience was still behind that of India. The report said offshoring will gain momentum in the future and predicted that that all 25 countries in the index displayed the necessary characteristics to attract companies to their shores. But it also expected competition to intensify among these countries, particularly between India and China.
Source: IANS
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