There's No Lack of Emerging Offshore Alternatives, Says A.T. Kearney

Ann All

"Flavor of the month" is a well-known concept when used to describe serial daters -- typically aging guys looking to foster a youthful image.

 

But it also seems to sum up the activities of many companies chasing after the cheapest and/or best offshoring experience -- and of the countries promoting themselves as alternatives to offshore giants such as India and China.

 

Estonia, for instance, landed on A.T. Kearney's list of top 50 global offshoring locales, beating out better-known locations such as Russia and Canada, reports CRM Buyer. Among the companies with a presence there is eBay subsidiary Skype. Ten new countries have joined the list since 2005, the last time that A.T. Kearney compiled one.

 

Financial attractiveness, based on a country's wages, infrastructure and taxes, accounts for 40 percent of the rating A.T. Kearney assigns to countries, which likely explains the entry of such locations as Uruguay and Pakistan.

 

But will those countries demonstrate staying power as desirable destinations for offshoring? Experts caution that cost should not be the primary factor in offshoring decisions.


 

Many of the countries make sense when viewed from a non-U.S. perspective. While U.S. firms shun Pakistan because of concerns over terrorism, it's a popular offshore site for Middle Eastern countries. Senegal and Morocco are populated with French speakers to staff call centers.

 

Other countries attract offshore work from certain industries because of their talent pools with specialized skills. Uruguay, for instance, is known as the "Switzerland of Latin America" because of its strong finance and banking industry.

 

Governments often go to great lengths to improve the offshoring appeal of their countries. For instance, the CRM Buyer piece details Kenya's efforts to install a submarine cable that would connect to Fujairah, one of the seven United Arab Emirates, and provide cost-effective bandwidth.

 

It's not surprising that governments are willing to go to this kind of trouble. Frost & Sullivan expects the global market for shared services and outsourcing to grow to $1.43 trillion by the end of 2009, from $930 billion in 2006.

 

And companies are increasingly willing to spread their offshore business around, says Gartner, which predicts that some 30 percent of Fortune 500 enterprises will outsource to three or more countries by 2010, up from less than 10 percent that do so now.



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Aug 7, 2007 8:41 AM praveen katiyar praveen katiyar  says:
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Aug 7, 2007 11:41 AM Gloria Gloria  says:
As the highest paid breadwinners at Fortune 500 companies get richer, which is partly the result of offshoring Americans jobs oversees, the middle class continues to get squeezed due to an increase in job loss and lower wages. They take advantage of other countries by paying lower wages, which is shameful.When will Fortune 500 companies wake up and smell the coffee? There is a huge backlash growing of Americans who are fed up with losing jobs to offshoring and with the recent scandals of China, it only further solidifies how we have felt all along... offshoring and too much importing doesn't equate to quality. As a matter of fact, our health and saftey are now being compromised (i.e. tainted toothpaste, poisended pet food, lead paint used on toys, etc.)Fortune 500 companies should prepare themselves for a backlash if they do not hire, retain and develop the talent right in their own back yard. As consumers, we don't have to purchase their products, which will in affect hurt their bottom line, and hopefully have them re-examine the root of most offshoring... corporate greed. Reply
Feb 20, 2008 12:42 PM Sastry Dhara Sastry Dhara  says:
With the declining US Dollar adding another important variable to the calculation of real value provided by off-shore outsourcing, small to medium companies in USA are increasingly looking at domestic IT companies to fulfill their IT needs.Our company recently replaced TCS (one of India's largest services company) at a software services company is USA. The customer is extremely happy with our services. Please visit our wesbite: http://www.dharacg.com for more details.Sastry Dhara Reply

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