Where to offshore (and why not here?)
Tholons, the research firm founded by well-known offshoring guru Avinash Vashistha, has just published some new research in Global Services magazine about the most attractive cities around the world for supporting the offshoring business.
These reports are published all the time, so the average reader can get a bit jaded. How many times do we need to read another report that says India is still the number one offshoring destination? However, the Tholons research is different in that they started focusing on cities rather than countries, and in quite a lot of detail, some time ago.
If you look at the popularity of countries as measured by how many of their cities make it into the Tholons list then – not surprisingly - India is the leader. India manages to get six cities into the top eight of the list, with Bangalore, Chennai, Delhi, Hyderabad, Mumbai, and Pune all cutting the mustard.
Interestingly, there are no Chinese cities in the list of leaders, however China does dominate the “up and coming” list with Shanghai, Beijing, Shenzen, Dalian, Guangzhou, and Chengdu all being recognised as places to watch. Don’t write off the Chinese dragon just yet as this up and coming list is probably where the future lies.
Makati city in the Philippines is singled out as one of the top global locations not in India. The Philippines is aiming for a 10 per cent share of the global market, which would be a substantial proportion of the entire national GDP if they can manage it. I remember attending a breakfast briefing in Manila last February and the President herself came and sat next to me. She asked me: “What do you do?” and I thought I was talking to Queen Elizabeth II, but at least I heard all these growth statistics straight from the head of state – over croissants.
Unfortunately, two British cities have dropped out of the Tholons top 50 list; Birmingham and Leeds. Both of these locations are actually hotbeds of regional talent in the UK and I recently heard that the Birmingham stock exchange – Investbx – has been doing a roaring trade helping to raise funds for local small entrepreneurs.
Perhaps the global downturn may actually encourage more regional talent and entrepreneurialism in countries like the UK, where the conventional wisdom has been that most services are going to go offshore? How about the UK being offshore for others?



Nevertheless, results from the 2008 Black Book of Outsourcing survey of top IT company executives reflect the growth of the Central and Eastern European markets compared to their Asian counterparts. The Black Book research as well as a Forrester Research study indicate that IT companies are redirecting their outsource spending toward providers that can come up with more than just simple labor.
Recent studies indicate that IT outsourcers are seeking greater knowledge of and attention to specific products and services and that the successful labor providers are those that show adaptability and response to their clients in a variety of ways.
More about these trends here:
http://www.executivebrief.com/article/beyond-the-price-of-labor-it-outsourcers-shifting-focus/
Posted by: ExecutiveBrief | Monday, 13 October 2008 at 01:53 PM