1. Argentina
Argentina is seen by many companies as an ideal location for
outsourcing.
For one, it has low market and labour costs. With
budgets tighter than ever, this is a
big plus for many UK firms.
Argentina also has a large labour pool[], which is highly literate,
both in terms of IT and language. Spanish is the first language
of Argentina, and English is the second.
The
labour
force includes a solid base of technically savvy and
well-educated workers,
particularly
programmers, ready for work at a reasonable price.
The country developed its
IT talent
during the dot-com boom of the Nineties.
During this time,
Argentina
supplied around 65% of the design and implementation work for most
of the regional Internet start-ups.
Argentina also boasts a robust, deregulated telecoms network,
and an abundant supply of office-space.
The Latin American country is also attractive because of
its cultural similarities to the West.
Argentina pros and cons
Pros - Argentina is rich in natural resources, has a highly
literate and skilled IT population, and a diversified industrial
base.
Cons - Argentina's government has done little to support or
develop IT outsourcing over the past decade. It has also suffered
some difficult economic problems - inflation, external debt,
capital flight, budget deficits.
However,
the economy is improving.
2. Bulgaria
Bulgaria
is climbing as an outsourcing centre, catching up on more
established centres such as the Czech Republic.
Amongst the
Eastern European outsourcing locations, Bulgaria competes with
Slovakia, Hungary, Poland Russia and the Ukraine.
Eastern Europe is attracting
many Western Europe firms looking to outsource, because of the
region's cultural affinity with the West.
Like the Czech Republic, Bulgaria's
relatively low costs and strong education system are key
factors in its favour.
Bulgaria has benefited from improvements in its business
environment, as a result of reforms carried out to qualify for
European Union membership.
Bulgaria joined the EU on January 1, 2007.
Bulgarian
outsourcing vendors excel in the more challenging programming
technologies, with developers being well versed in C++, Java
and
open source.
Bulgaria also has a good mix of high skills, fairly low labour
costs and good production quality.
Bulgaria pros and cons
Pros - As
an EU member, Bulgaria has a close affinity with western
European countries and businesses. The IT outsourcing sector has
benefitted from economic reforms, and
the country offers highly skilled developers.
Cons -
The cost of outsourcing to Bulgaria can be higher than
outsourcing to the Far or Middle East and Africa.
3. China
Along with
India,
China
is still a top outsourcing domain, and
is growing in popularity.
Its IT sector is also growing
and developing.
China provides an excellent supply of
low-cost outsourcing resources - labour in particular - as is
the case with India.
Secondly, if western companies are dealing with customers or
companies who have Asian headquarters, there is
a language and
cultural advantage to outsourcing to China. For example, in
cities like Shanghai, engineers tend to be multi-lingual, speaking
Japanese and Chinese.
However, when it comes to the
English language capability of Chinese workers, this tends to
be unsatisfactory for many western businesses.
China also lacks good
protection for intellectual property, so software or products
could be duplicated with little comeback.
Another consideration is that
China is several time zones away for western companies,
particularly US firms,
which can make communicating hard work.
China pros and cons
Pros -
China offers low-cost outsourcing, and strong links with Asian
markets. It is also worth considering for low-cost software
development.
Cons - Intellectual property protection is limited, language may
be a barrier in working with
Chinese vendors and workers, and China is many time zones
away.
4. Egypt
As an IT outsourcing region,
the
Middle East and Africa is growing as a home to remote services for
global companies in Europe, Asia and the US.
Egypt, Jordan and the United Arab Emirates (UAE) are all on the
rise, along with Tunisia, Ghana, South Africa, and
Israel - with its extremely skilled programming workforce.
Egypt, in particular,
claims to have one of the largest talent bases of any country
in
the
Middle East.
It is home to an increasing number of outsourcing centres
operated by multinationals. For example,
Indian outsourcing
giantsSatyam and
Wipro have expanded by setting
up outsourcing centres in Egypt.
Egypt is recognised for its young working population, large
multilingual workforce, solid infrastructure and competitive cost
structure.
The
Egyptian
government also offers tax incentives to outsourcing
propects.
Egyptian
outsourcing firms claim that their language skills and low labour
cost would be able to compete with India in terms of handling
outsourced work.
Egypt pros and cons
Pros - Egypt is growing in popularity, boasting a large
multilingual workforce, and solid IT infrastructure.
Cons - Egypt, and
the Middle East region as a whole, continues to be politically
volatile. As such, it may be unappealing to some Western
businesses.
5. The Philippines
Southeast Asian nations are continuing to build up an
outsourcing presence.
The Philippines is one of the faster growing countries, vying
with Malaysia, Thailand, Indonesia and Singapore.
The Philippines has a blossoming
IT outsourcing sector, and
the lowest wage and telecoms costs of all the outsourcing
countries.
The
Philippines is strong in back-office outsourcing, in addition
to its
traditional
contact centre services.
Back-office firms provide finance and accounting, HR
management, payroll, logistics and publishing.
Philippine outsourcers also specialise in application development
and legacy application maintenance, and are well versed in
Java and .NET.
Recent currency appreciation has driven wages up by a third, but
the country has managed to stay cost competitive despite this.
The Philippines has a close cultural affinity with the US, and
workers have a good command of English.
It is a popular choice for companies that want to move their
low-level maintenance work offshore.
Philippines pros and cons
Pros - The Philippines is a good location for straightforward
software development projects,
business process
outsourcing, and legacy application maintenance, for a good
price.
Cons - The time zone difference may cause problems. The
country's software services sector is not as big or broad as, say,
India.
There is also the question of political instability.