What do you need to know to access the ‘secret ingredient’ that outsourcing can provide your company?
The Business Case for Outsourcing
The key question when looking at outsourcing is to have a candid assessment of your company’s strategic needs and goals. The usual suspects are trolleyed out in most business cases for outsourcing:
Outsourcing provides a reliable and immediate source of an adaptive workforce that can react in a timely fashion to a rapidly changing marketplace.
Outsourcing can reduce costs, improve customer service and increase productivity.
Outsourcing improves competitive differentiation — how your company stacks up to the competition — by allowing you to tap into a fluid supply chain of highly trained professionals.
Companies are realising the world over that outsourcing fulfils a strategic need for business success.
Where should I outsource to?
India and China are unquestionably the leaders in overall outsourcing. Other destinations such as Philippines, Sri Lanka, Estonia etc have established themselves as a growing influence in the world of outsourcing. For any company looking for IT needs offshore, one place still retains the top spot far ahead of its rivals. India, take a bow.
Outsourcing has a distinctly international flavour, no surprise really is it. 6 of the top outsourcing destinations are located in India and 2 of them in the Philippines. We have picked up these cities from Tholons 2016 rankings, and highlighted their pros and cons with regard to outsourcing:
- Bangalore, India
Bangalore continues to be the world’s No.1 outsourcing destination for the past 25 years. The city offers a unique combination of a talented workforce with first-rate English skills, a large pool of vendor selection, impressive infrastructure, and partnership opportunities.
Along with a pleasant weather and a cosmopolitan culture, Bangaloreans enjoy a lively nightlife. The only trouble is the increasing traffic in certain parts of the city, which is expected to be overcome with the metro rail project.
- Manila, Philippines
Manila has fast emerged as a top outsourcing destination, particularly for Finance and Accounting Outsourced (FAO) services.
Salary costs in Manila compares favourably against other outsourcing destinations such as Singapore and Kuala Lumpur.
- Mumbai, India
More than 5% of India’s total GDP is generated from Mumbai, crazy huh.
Decent infrastructure and talented workforce make Mumbai a preferred outsourcing destination for BPO services.
- Delhi, India
Being India’s capital city and the country’s political power house, Delhi enjoys one of the lowest infrastructural constraints compared to other Indian cities.
Delhi and its adjacent NCR (National Capital Region) have seen the quicker transformation over the past 15 years, making Delhi a most favoured IT and BPO outsourcing hub.
The city is known for its extreme weather conditions. Between summer and winter, people have to adjust to sharp temperature differences.
- Chennai, India
Chennai is known as the “Gateway of South India” and produces a number of highly qualified technical graduates from its pool of top-ranking educational institutions, including the prestigious Indian Institute of Technology (IIT), Madras.
Chennai offers the finest infrastructure and a very low cost of living.
- Hyderabad, India
Hyderabad ranks second among the largest providers of IT-enabled services in India.
The largest number of highly educated professionals in India emanate from this city.
The city is currently serving as the twin-capital for the erstwhile State of Andhra Pradesh, which has been bifurcated into Telangana and Seemandra. Political movements to bifurcate the state have led to deep social tensions among the citizens of both states.
- Cebu City, Philippines
Cebu is a major commercial hub with leading universities including San Carlos and South Western.
The local government aims to grow the outsourcing industry by 15 percent in the next three years.
Experts have however observed the need for Cebu to produce more talented workforce.
- Pune, India
Pune is a well-established outsourcing IT destination with most business-friendly areas like Kharadi, Hinjewadi, and Tathawade.
The city has lower real estate costs and is house to 50+ top IT and BPO companies who have their main offices here.
The language skills in English are found to be average when compared to other cities.
- Kraków, Poland
Kraków is one of the highest ranking cities in Central Europe with reputed universities.
Advantages of investing in Krakow include quality and size of the labour market and costs related to conducting BPO business activity.
Nevertheless, the outsourcing sector in Kraków is working towards breaking certain trust barriers which still exist, making potential clients reluctant to invest in this city.
- Dublin, Ireland
Dublin offers highly qualified staff and has a globally recognised educational system.
Many companies service clients with ‘first-language’ employees.
Although an attractive destination, costs are comparatively less competitive than the other top destinations mentioned above.
What to Look Out for
Many countries are vying to become the most favourable outsourcing destination. Do your due diligence and look into the history countries have in successful outsourcing models. New and shiny something may be but tried and tested is the winning formula when looking at outsourcing.
With regards to Tandem NZ, the choice was simple. Base ourselves in the number one spot for outsourcing in the world with access to the best source of talent available to ensure our customers get the quality they need.
Find out more about how outsourcing could work for you, especially when you only have to deal with a locally based NZ company.