India losing luster as offshore site, says report
By Lawrence Casiraya
INQUIRER.net
First Posted 16:14:00 03/04/2008
Filed Under: Economy, Business & Finance
MANILA, Philippines -- Major IT services vendors in the United Kingdom are looking to set up offshore sites outside of India, according to Paris-based consulting firm Pierre Audoin Consultants (PAC).
In its report, PAC noted that 20 of the largest IT services suppliers operating in the UK have opened offshore delivery centers since January last year but only two of these are located in India.
On the other hand, four were set up in China and three apiece in Eastern Europe and Morocco.
The report also noted that even though China is initially a target for vendors because of its domestic market, these new delivery centers may indicate that it is also a site for offshore expansion.
The report also mentioned a move by call center operator Convergys to close its delivery centers in Canada and instead replace it with operations in the Philippines. Convergys already employs more than 11,000 agents in the country.
Included in the list of top UK-based IT services vendors are IBM, Accenture and LogicaCMG, all of which have delivery sites in the Philippines.
Logica, in particular, has said it would increase its workforce in the country from 220 to 1,000 people this year, forecasting a healthy market for IT outsourcing in European markets.
India's position as the premier low-cost IT sourcing centre is not under serious threat in the near term, according to Nick Mayes, senior consultant at PAC.
"But what we are seeing is vendors looking to reduce their reliability on India's heated labor market, while adding non-English language skills to support clients in regions such as Central Europe," Mayes said.
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