Investigating Outsourcing

Sep 28 2012   11:34AM GMT

India’s dominance as offshore IT location being diluted

KarlFl40 Profile: KarlFl40

South Africa

Effective alternatives to India for IT services are reducing its dominance as an offshore location for large businesses, according to Gartner.

But where are the alternatives and who is using them?

There are, according to Gartner, 30 leading global locations for offshore services as well as another 50  other options that “have either started initial activities to establish an environment attractive to companies considering investing in lower-cost countries, or become home to external service providers that are beginning to sell services abroad.”

Businesses are trying to create global delivery so are buying services from across the globe.
According to Gartner Currently 63% of global buyers of IT services use Latin American locations, 63% use locations in Asia/Pacific and 55% use locations in EMEA.

In Latin America Mexico servers 50.2% of businesses offshoring IT to the region, while Brazil has 46.8% and Argentina 22.1%.

The EMEA’s biggest offshore service provider is Poland with 25.3% of businesses using the region buying from Poland. Russia has 19.2% and South Africa 16.6%.

In Asia/Pacifc 48.5% of IT services buyers get services from India with China close behind with 45.9% and Malaysia 13.9%.

Western European buyers predominantly use India (35%), Poland (21%), Brazil (18%) and China (16%). The UK is probably even more dominated by India because of the language advantage.

Ian Marriott, research vice president at Gartner says IT suppliers are spreading their resources to meet customer desires to globalise. “Providers are beginning to de-focus further investments in India and will aim to create critical mass across a number of these centers.”
“This will allow them to establish a global delivery network through a combination of common methodologies, tools, processes and procedures, to provide seamless and consistent delivery capabilities to their customers, wherever they are located.”

Here are articles I have written about some of the regions mentioned:

Brazil will be a massive location to source IT, but challenges remain

IT operations in Malaysia could offer the near China experience 

Chinese IT services providers can be a gateway to Chinese economy for big business 

Is India becoming too expensive for offshoring your IT? 

South Africa is a low cost call centre option with investment funds on offer 

Are nearshore suppliers the best low cost option for agile software development? 

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2  Comments on this Post

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  • James James
    I T services are what the name implies, services. Outsourcing to India never improved services. In fact, Indian I T firms have a track record of not delivering to schedule, shoddy quality, and unhappy customers. They are cheap, so to firms that dont really care about service or quality, they remain attractive because of the price. But what does this say about the firms that use them. Also, many Indian I T firms have become little more than procurers of visas for their staff. They have swamped the West with actually very poor systems staff (duck responsibility, failure to deliver etc.) while good people are unemplooyed.

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  • Matt X
    +1 for James.

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