India and China remain on top for offshore IT and business process outsourcing services in the Asia Pacific region, but various countries are also strengthening their positions by making considerable investments, according to a research by Gartner.
According to the Gartner, India stands as the undisputed leader in offshore services in Asia Pacific, while China remains as the greatest challenger in terms of potential scale. Other countries include a mix of mature environments that offer limited cost benefits such as Australia, New Zealand and Singapore and emerging countries with a various challenges, but attractive costs such as Malaysia, Indonesia, the Philippines, Thailand and Vietnam.
Jim Longwood, research vice president at Gartner, said: “Countries such as Malaysia, the Philippines and Vietnam have continued to strengthen their position against leading alternatives, while Indonesia has entered the top 10 for the first time.”
“Some of these countries have invested considerably and leveraged increased demand for lower-cost services. The global financial crisis forced many organisations to place a greater emphasis on cost optimisation.”
India continued to grow in terms of IT services being exported but its relative share of the overall worldwide total has declined. Gartner said that India is starting to face some challenges including wage inflation, local attrition rates, geopolitical issues and financial irregularities that are opening opportunities for other countries.
The research firm said that the global financial crisis and the US currency fluctuations showed little impact on the Asia Pacific region. The mature markets of Australia, Singapore and New Zealand were rated high on language, political and economic environment, cultural compatibility, globalisation and legal maturity, data and intellectual property, security and privacy.
Mr Longwood, said: “As organisations increasingly look at global delivery as a means to reduce cost, they will need to focus on important areas such as security, data and IP protection and compliance. However, the link between lower risk and higher cost holds true.”
