India still No.1 destination for outsourcing
India still No.1 destination for outsourcing
Sep 23, 2005: Gartner has found that India is still head and shoulders above the competition when it comes to global outsourcing, but has identified a number of other countries which are up and coming too.
In addition, Gartner has created a six-step guide to effective offshore outsourcing to make the most out of global resources.
The research found that strong government support is propelling China's capabilities into the frame, while Latin America, Brazil and Mexico are becoming more attractive destinations too. In addition, Eastern Europe, the Czech Republic, Hungary, Poland and Russia are some of the countries to watch too.
The first three of the six-step approach recommended to companies considering offshore outsourcing, include being aware of when an internal organisation is ready and able to use a variety of potential supply destination, and if it can manage it; where an organisation should go to find the right blend of factors that make a country suitable as a supplier of IT services and why should an organisation consider a nearshore country rather than an offshore location.
The other three include knowing what service types (e.g. infrastructure), can be found in which country; how does an organisation determine whether to use a captive centre, a multinational provider or a local provider and who can the organisation select to deliver its services or help with establishing its own.
Ian Marriott, the research vice president at Gartner, said that businesses should evaluate the costs-versus-risk equation.
"Any contract with ESPs brings a certain set of risks that need to be managed so that a successful relationship develops. When using offshore service providers, these common risks become more prominent, and some uncommon risks appear.
"Although infrastructure, relationship, human capital consistency, scoiopolitical bias or legal jurisdiction are not typically included in the due diligence process of vendor selection. Organisations must understand the various types of risks when using global software teams or offshore outsourcing, and access each through a more rigorous due diligence of the short listed offshore firms."
Gartner said that India is the clear leader at the moment for outsourcing because it has the majority of essential resources and sufficiently robust infrastructures to deliver IT products and services successfully.
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