New Delhi: Look who is out to rival India's supremacy in the BPO space! You won't even guess it: Philippines and Russia are fast emerging as new destinations in the IT outsourcing market and they are out to give India a stiff competition in 2007.
According to the study by a California-based consulting firm, NeoIT, while India continues to be the top outsourcing destination and still enjoys the advantage in the world market when it comes to technology outsourcing,
"The year 2007 will see Russia emerging as a strong contender in the IT outsourcing market. It currently is the third largest
IT outsourcing market behind India and China," the study says.
Russian IT companies specialise in high-end software and embedded software product development, which acts as a differentiator from low-prices offerings from Indian companies. "The Russian IT offshoring industry is likely to grow at 40-50 per cent in 2007," the report said.
Filipinos are providing excellent English language skills and that plays a key role in business process outsourcing. It competes very strongly with India in voice-based processes. Its financial and accounting skills are also at par.
Indian IT and BPO have started setting up operations in the Philippines because of two major reasons -- clients want to de-risk and want second English location and attrition/shortages of staff in India are starting to impact projects.
In 2007, both Russia and Philippines will continue their growth as outsourcing locations and an overall growth of 25-30 per cent will translate into emergence of new offshore and near shore locations with hard-to-ignore players, mergers and acquisitions and scaling up of capabilities.
One big advantage of Philippines is the ease in cultural affinity with the US. It is this factor that makes it easier for tier-II clients to attempt setting up captive centres in the Philippines. What may be the critical catalyst at this crucial juncture is aggressive regulatory incentives in the Philippines for captive centre operations.
It will continue to benefit from the focus on portfolio management as buyers expand their services globalisation efforts.
The report also talks about a rapidly emerging European market where it said the market for global services will grow at a faster rate this year as some European enterprises have 'proved the concept' and set an example for their peers.
With increasing maturity in near shore delivery capabilities, European language speaking countries like Hungary, Czech Republic, Russia, Poland, Bulgaria and Romania shall support this trend.
With almost all major European delivery locations under the EU, it has become easier from a regulatory standpoint to get services to India, Philippines and China and other low-cost locations depending on the language and culture-dependence of the service.
(With PTI inputs)
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