India leads in top locations for ''offshore'' work : 2005 AT Kearney survey
Our Corporate Bureau
23 November 2005
Mumbai: While India, China and Southeast Asia continue to dominate A T Kearney's annual ranking of the most attractive locations for "offshoring" of service activities such as IT, business processes and call centres, the United States ranks surprisingly well in a new version of the index.
For 2005, the global management consulting firm added four lower-cost cities in the United States, United Kingdom, Germany and France to determine how they compare to more traditional offshore locations across the 40 measurements analysed to create the Global Services Location index (previously known as the Offshore Location Attractiveness index). The US, represented by San Antonio, ranked 11th out of the 40 countries evaluated.
- India remains the best offshore location by a wide margin, although wage inflation and the emergence of lower-cost countries decreased its overall lead.
- Improved infrastructure and relevant people skills have increased the attractiveness of China as a low-cost option for servicing Asian markets.
- Thailand jumped from 13th to 6th in this year's index and Southeast Asian countries now make up four of the top six locations on the index.
- Offshore attractiveness in Europe continues to migrate eastward as Bulgaria, Slovakia and Romania all enter the index for the first time.
- The Middle East and Africa appear to be the next frontier in offshoring as countries such as Egypt, Jordan, United Arab Emirates and Ghana perform well.
India and China: still dominating:
- India still leads by a wide margin.
- The gap between India and the second-ranked country, China, is larger than the gap between the next nine countries combined.
- India's lead has shrunk slightly compared to 2004. This is mainly due to a slight reduction in India's financial attractiveness, the result of wage inflation in India and
- The emergence of new even lower-cost contenders such as Ghana and Vietnam.
China maintains its second place ranking and partially closes the gap with India, thanks largely to continued improvement in its infrastructure quality and the availability of relevant people skills. For example, the number of development centres in China with CMM or CMMI certifications (an industry standard for rating the process-quality of IT development centres) showed the largest increase of any country in the index, jumping from 108 in 2004 to more than 277 in 2005.