Back in March, I commented on a report by French consulting company Pierre Audoin Consulants that found outsourcing powers like IBM and Accenture turning to locales other than India for their offshore delivery centers. Rather than a disenchantment with India, I wrote, such moves were indicative of providers wanting to offer a greater variety of locations to their clients, including nearshore sites geared more toward delivering business strategies than simple labor arbitrage.
It turns out it may have been a little bit of a both, based on the newest edition of the Black Book of Outsourcing, published by the Brown & Wilson Group. Just 10 Indian companies made it to the list of the 50 best-managed global outsourcing providers, according to ZDNet UK. HP was tops on the list, moving up from number eight in 2007. The top Indian performers were Wipro, Satyam and Genpact, which took the sixth, seventh and eight positions.
There was a fair amount of movement in Indian providers' positions, most of it not positive. The Economic Times cites the report's mention of a "growing appreciation for U.S.-centric firms." The report also plays up what it calls "reverse outsourcing," the trend of Indian companies establishing U.S. operations and employing local workers. Iwrote about this in March, citing Wipro's decision to open offices in Atlanta and Troy, Mich., and Tata Consultancy Service's move to open one in Cincinnati.
As I mentioned then, the strong rupee and weak U.S. dollar make hiring local employees an increasingly attractive alternative to dispatching Indian workers to the U.S. , with no hassles over obtaining visas or other necessary documentation. But client desires obviously factor in as well. According to The Economic Times story, Black Book survey respondents mentioned a client-centric culture, cultural alignment and an appropriate onshore-offshore balance as their most coveted supplier features for 2009.
Another interesting tidbit from the Black Book, according to the Wall Street Journal: Despite the increasing popularity of Latin American and Eastern European countries as outsourcing destinations, the U.S. is the third most popular outsourcing location for Western European companies, after India and China.