Major Countries Involved in Offshore Outsourcing

Offshore outsourcing is the practice of sub-contracting to a third-party company to perform certain back-end operations in a country other than the one wherein those products and/or services are developed and manufactured. Any company when deciding to hire an offshore outsourcing entity has several goals in mind, but the two major ones are to improve productivity levels and to increase profitability.

Since the 1980’s, outsourcing has become a major facet of the business world. The concept has facilitated an effective utilization of capital, global resources, skill proficiency levels, and technology where quantifiable cost-effectiveness is the key issue. According to a Goldman Sachs survey, since 2001, approximately 600,000 service sector jobs have gone to offshore outsourcing entities. By 2015, it is estimated that over 3 million white-collar jobs will have moved offshore.

The Global Services Location Index (GSLI) released this past February (2008) by the A.T. Kearney firm discusses the compiled data for 2007 regarding the most active countries involved in offshore outsourcing. Not surprisingly, India still ranks as the #1 outsourcing location.

Next in line was China, which was not a surprise either. There were 50 countries listed in the index, all of which fared extremely well in the area of financial attractiveness. However, the two key factors of people and skills availability are what separated China and India from all the others.

International Services Outsourcing, or InSO, is one of the truly unique outsourcing companies. Unlike so many other companies in the outsourcing arena, InSO provides the client with a best-of-both-worlds scenario by providing on-shore management quality at offshore outsourcing cost-effectiveness. They have headquarters in Los Angeles and have an offshore presence in India.

Outsourcing entities are classified into four categories:

• BPO – Business Process Outsourcing (e.g. call centers)
• ITO – Information Technology Outsourcing
• KPO – Knowledge Process Outsourcing
• Software R&D – offshore software development

Outsourcing provides a company with a competitive edge while not having to invest in the infrastructure of the business. Typically, the most common areas for outsourcing relate to call centers and telemarketing, although web designing and web development are part of the mix as well. The two most common categories of business relationships you find are the Business-to-Business (B2B) and Business-to-Consumer (B2C) types.

The current top five countries in the outsourcing industry, where the key issues of ‘people and skills availability’ criteria are:

1. United States
2. India
3. China
4. Germany
5. France

However, this only relates to two of the dozens of criteria that were used in the GSLI ranking system. The following countries (listed as the top 10) were the ones that were considered to be the best outsourcing destinations because they provided the most competitive advantage:

1. India
2. China
3. Philippines
4. Malaysia
5. Singapore
6. Czech Republic
7. Brazil
8. Canada
9. Chile
10. Poland

So why is India consistently the #1 destination for offshore outsourcing, and why does InSO maintain their offshore presence in India? In the five years period between 1998 and 2003, India grew from $2.5 to $10 billion in the IT software and services outsourcing niche alone. That number is expected to hit $31 billion by the end of 2008.

Here are the top 10 key reasons why India continues to have the competitive edge over other outsourcing countries:

• India is #1 overall with English language skills and proficiency levels
• There is a greater availability of IT skills
• They have a much more innovative and high speed communicative system
• Their work force is much more skilled
• India’s outsourcing rates are the most competitive of all the countries listed
• The overall productivity rate is more enhanced
• In terms of on time delivery of client services, remarkable benefits are provided by Indian outsourcing entities
• India provides their clients with the best overall ROI at the greatest cost-effectiveness factors without tearing up the infrastructure of the client
• Overall efficiency of the business activities are typically increased
• India is extremely flexible where legal matters are concerned

International Services Outsourcing (InSO) is a leader in the BPO industry and can help your business achieve its goals, namely increased productivity and profitability. Contact us today so that you can see how InSO delivers on-shore quality at offshore affordability. Please visit our website at www.inso.us and let us show you why we are your “One-Stop-Shop” outsourcing center.