PAC report: IT Services vendors look beyond India as offshoring matures
-- Manufacturing Business Technology, 3/12/2008 9:41:00 AM
Major IT services vendors have turned the focus of their offshore sourcing strategies away from the established centres of India, according to new research from Pierre Audoin Consultants (PAC).China, Morocco, and Hungary are the new locations of choice for IT services suppliers that are looking to open offshore sourcing centres. The 20 largest IT services suppliers operating in the U.K.* have opened a total of 21 new global delivery centres since January 2007, but only two of these were located in India. In contrast, four were set up in China, with three apiece in Eastern Europe and Morocco.
The two new facilities launched in India were both outside the traditional hotspots of Bangalore and Mumbai: IBM’s new centre in Noida, and Tata Consultancy Services’ expansion site in Hyderabad.
China’s emergence as a global sourcing hub has been slow, with most services vendors initially looking to target business with the country’s fast-growing corporations, rather than use local resources for offshore delivery. However, BT Global Services, EDS, IBM, and Tata have opened sourcing facilities in the country in the last 18 months.
It is not just in India where changes are taking place. Earlier this month, contact centre services firm Convergys revealed it would close its support centres in Canada and replace them with operations in the Philippines and India, as the appreciation of the Canadian dollar has wiped out much of the country’s cost advantage. Meanwhile, CSC and EDS opened new facilities in rural U.S. to provide lower-cost support to major metropolitan areas.
Says Nick Mayes, senior consultant, PAC, “India’s position as the premier low-cost IT sourcing centre is not under serious threat in the near term. But what we are seeing is vendors looking to reduce their reliability on India’s heated labour market, while adding non-English language skills to support clients in regions such as Central Europe.”
* The 20 largest IT services vendors in the U.K.—based on rankings in PAC’s annual Software and IT Services Industry report—include EDS, IBM, Fujitsu, Capgemini, Capita, Accenture, CSC, HP, BT Global Services, and LogicaCMG.
Talkback
Related Content
Sponsored Links
More results on MBT Research Library