AT Kearney releases report on top outsourcing destinations
Date: May 18th, 2009
A recent published list (see below) by A.T. Kearney, a consulting firm on top outsourcing destinations (LINK).
KPMG had a recent report similar to the A.T. Kearney report which highlights some of the top cities around the world for offshoring (LINK)
A number of consulting firms publish a location index, best countries, cities for offshoring. The challenge for companies looking to outsource or evaluate global locations is how to use the information. Given that year over year this continues to change, it is hard to put together a global operating model of how you plan to operate based on the list. For example ‘Hot’ locations such as Poland, Hungary are now ’luke warm’ due to rising cost, currency.
India and China do seem consistently be the top locations. The cost saving expectation is slimming down in these two locations but India still continues to lead in services industry and China in manufacturing. For a number of corporates the location choice still remains India. What is interesting in this study and something worth looking at more closely is the locations closer to home. So for the US firms looking at Tier II cities for setting up shared services centers is being looked at more closely. Be it partly political or frustration with voice based services from a distance country, local locations continue to be evaluated more closely now. That decision though is not just drive by cost alone.
The report does indicate that risk management for outsourcing is going to continue to play a bigger role which does seem to be the market trend and is consistent irrespective of the location someone chooses.
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A.T Kearney Global Services Location Index 2009
(number in parenthesis indicates ranking in 2007 GSLI)
1. India (position in 2007 GSLI: 1) 26. Senegal (39)
2. China (2) 27. Argentina (23)
3. Malaysia (3) 28. Canada (35)
4. Thailand (4) 29. United Arab Emirates (20)
5. Indonesia(6) 30. Morocco (36)
6. Egypt (13) 31. United Kingdom (Tier II)* (42)
7. Philippines (8) 32. Czech Republic (16)
8. Chile (7) 33. Russia (37)
9. Jordan (14) 34. Germany (Tier II)* (40)
10. Vietnam (19) 35. Singapore (11)
11. Mexico (10) 36. Uruguay (22)
12. Brazil (5) 37. Hungary (24)
13. Bulgaria (9) 38. Poland (18)
14. United States (Tier II)* (21) 39. South Africa (31)
15. Ghana (27) 40. Slovakia (12)
16. Sri Lanka (29) 41. France (Tier II)* (48)
17. Tunisia (26) 42. Ukraine (47)
18. Estonia (15) 43. Panama (41)
19. Romania (33) 44. Turkey (49)
20. Pakistan (30) 45. Spain (43)
21. Lithuania (28) 46. New Zealand (44)
22. Latvia (17) 47. Australia (45)
23. Costa Rica (34) 48. Ireland (50)
24. Jamaica (32) 49. Israel (38)
25. Mauritius (25) 50. Portugal (46)
*Based on lower-cost locations in each country: San Antonio (U.S.), Belfast (UK), Leipzig (Germany) and Marseilles (France).
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