Outsourcing To India Vs. China
The Philippines and China will provide India with tough competition in offshore outsourcing operations in the coming years, according to a business process outsourcing (BPO) firm based in the US.
He said the Philippines was in a better position compared to India as Filipinos were not required to undergo accent neutralization training due to their better English speaking capability, owing to the presence of a US naval base there.
Compared with China, he said that India was in an advantageous position in terms of English speaking capability, although Indians required accent neutralization training.
Vashista said that now high-end BPO operations like knowledge-based transactions, claims processing, financial accounting, human resources and complex banking transactions were being outsourced offshore.
This, he said, would give India a tremendous opportunity in this sector.
According to a NeoIT study, Canada and Ireland were the two countries where quality of work was the best, but costs were high.
Why are jobs being farmed out to these two destinations in particular? Both countries offer cheap labor rates and have different areas of expertise. The cost of an entry-level programmer in China is 30% to 50% less than one in Chicago. Additionally, a combination of factors like standardized business application, better online cooperative tools and increased bandwidth have recently precipitated the rise of off-shoring.
Of the two countries, India remains the No. 1 choice for many U.S. companies because of the maturity of its outsourcing market and its telecom infrastructure. But China is quickly imposing itself as a cheaper alternative, especially attractive to companies eager to explore its huge local market. Other countries like the Philippines, Singapore, Russia and Ukraine have lately surfaced as interesting alternatives to the two giants. But they lack experience and, in some cases, political stability.
In the upcoming years, expect India to continue its move up the food chain and take on some of the more complex outsourced tasks while more back-office jobs move to rock-bottom wage countries such as Vietnam and Uruguay.