Friday, January 06, 2006

Indian Outsourcing facing competition

India will keep its dominance in the outsourcing (BPO) business in 2006, but would face stiff competition from nearshoring, where USA and European companies will ship back-office work to destinations near their countries, says a research firm neoIT." According to Times of India Report as stated by Offshoreoutsourcingworldblog.
It says Latin American countries like Brazil, Argentina, Mexico and Costa Rica will be developed by US companies as nearshore destinations because of "US friendly policies, geographical proximity and cultural compatibility".

NeoIT expects a similar trend to emerge in Europe where Russia, Poland, Romania, Hungary and the Czech Republic will develop as "high-quality, nearshore destinations" for West European clients. In Asia, countries like Malaysia and Sri Lanka will emerge as low-cost destinations offering niche services. China, too, will progress significantly as a preferred destination for outsourcing.

The research predicts that during the next year a wide range of core and knowledge-driven services will be outsourced, especially in research based areas like markets, law, taxation, consulting and engineering services. However, as a general trend, it also has a set of warnings in store: "More than 30% of offshore outsourcing relationships will face challenges due to inadequate planning, unrealistic expectation, inaccurate vendor choices, incomplete process and knowledge transitions, and a lack of focus on ongoing programme management".
For details read here.

The article is sponsored by A-1 Technology Inc, dealing in offshore outsourcing and offshore software development.