We've heard lots of noise over the past year or so about outsourcing contenders that are threatening India -- from China to Eastern Europe to Africa. They have their work cut out for them, judging by the results of the 2006 Sourcing Magazine Black Book of Outsourcing, which ranks the 50 best managed global outsourcing firms.
Indian firms took five of the top 10 spots on the list. This despite recent media coverage detailing a myriad of problems faced by Indian outsourcing providers, including trouble retaining top talent, infrastructure issues and security concerns.
Some pundits have theorized that these issues are driving companies to look elsewhere for outsourcing, and made much of recent decisions to leave the country. Perhaps most notably, Apple pulled out of a support center there earlier this summer.
Interestingly, however, a recent study from DiamondCluster International seems to indicate that companies are more dissatisfied with onshore outsourcing agreements -- based, at least, on the contracts that they've chosen to cancel prematurely. True, India no longer offers the lowest prices. But it does offer a numerous benefits that appear to mean more to companies as the outsourcing model matures. Outsourcing is now less about getting the cheapest programmers or support staff and more about using outside firms to help refine non-core business processes.
India's biggest advantage continues to be an apparent willingness to find out what companies want most from their outsourcing agreements and to focus on delivering those desired qualities. It's what got India to the top of the outsourcing heap in the first place -- and what will likely keep it there for the foreseeable future.