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India losing crown as off-shoring destination, says report

John-Paul Kamath

IT services suppliers have turned the focus of their offshore sourcing strategies away from the established centers of India, according to new research from Pierre Audoin Consultants (PAC).

China, Morocco and Hungary are the new locations of choice for IT services suppliers that are looking to open offshore sourcing centers.

The 20 largest IT services suppliers operating in the UK have opened a total of 21 new global delivery centers since the beginning of January 2007, but only two of these were located in India. In contrast, four were set up in China, with three apiece in Eastern Europe and Morocco.

The two new facilities launched in India were both outside the traditional hotspots of Bangalore and Mumbai. IBM's new centre is in Noida and Tata Consultancy Services' expansion site is in Hyderabad.

China's emergence as a global sourcing hub has been slow, with most services suppliers initially looking to target business with the country's fast-growing corporations, rather than use local resources for offshore delivery. However, BT Global Services, EDS, IBM and TCS have all opened sourcing facilities in the country in the past 18 months.

Nick Mayes, senior consultant at PAC, said, "India's position as the premier low-cost IT sourcing centre is not under serious threat in the near term. But what we are seeing is suppliers looking to reduce their reliance on India's heated labour market, while adding non-English language skills to support clients in regions such as Central Europe."




Related Topics: IT outsourcing, VIEW ALL TOPICS

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