Exploring Global Frontiers (2009)

Globe trotting is a familiar term today, not only to an avid traveler, but also to growing IT and BPO enterprises. Rapid Gross Domestic Product (GDP) growth in developing countries in the last few years has been a motivating force for globalization. Countries in the developing markets are offering lower cost destinations for outsourcing services, and also access to their markets which have high growth potential.

A favorable business environment, access to a good supply of talent, good quality of life and lower costs are some of the factors that are being sought out by IT-BPO companies investing in emerging locations.

As the existing favorite locations start to become saturated, newer cities are emerging, offering “new and improved” incentive packages and talent, that is better geared for the outsourcing industry. Our choice of 31, though dominated by cities in developing countries, also includes some onshore or near-shore developed city-country pairs, that we believe may also be valid competitive alternatives to the existing favorite locations such as Bangalore and Chennai.

Some of these destinations are hot tourist spots, and therefore, are more visible on the world map. Then there are other locations which are relatively unheard of, but are seeing traction as they have historically had a good education system and are working on improving their infrastructure.

Governments keen to get a piece of the outsourcing pie, are offering various incentive programs to bring IT-BPO business to their countries. Some cities are also becoming actively involved, independently promoting their capabilities and available programs. To create a “unique selling point”, specific services such as accounting, research and development, and animation are being promoted.

The options available are immense, and “the world is my playground” is an appropriate expression in the outsourcing industry today. However, it is imperative for enterprises comparing the alternatives to consider the risks and rewards associated with the emerging locations versus the more established locations. A “one-size-fits-all” strategy may not be appropriate with location selection. Companies should consider their needs, and align their vision with what different locations offer when considering their location assessment strategy.

Exploring Global Frontiers (2009)