One of the decisions that companies in the West must make in outsourcing management is which country to outsource the business to. How do the different countries compare and what are the advantages or disadvantages of each? Let’s take a look at some of the more popular countries for hosting outsourced services.
India is by far the leading country in offering offshore services. It has a strong local skill set for IT services, remote infrastructure evaluation and general business process outsourcing (BPO) such as call centers. Indian employees are able to meet the demands of a technology driven market. What’s more their companies have shown precision in keeping records such as employee pay and cost structure. This has seen various US companies outsourcing management of other non-IT areas such as Human Resources (HR), administration and accounting to India. But in the recent past, India’s reputation as a leader in outsourcing has seen some reputation damage due to issues such as weak adherence to US privacy laws, increase in tax rates and financial scandals.
China is another recognized force in offshore outsourcing management. It also boasts low labor costs making it a preferred choice for both IT and manufacturing outsourcing. However one of the biggest hurdles to Chinese firms is the language barrier that hinders US companies from recognizing it as a practical location for outsourcing. Little wonder that as part of outsourcing management, American companies are paying a slight premium to English–speaking employees based in China.
The Philippines is another growing market for outsourcing management. Due to its few cultural barriers and relatively advanced infrastructure, it is able to support American operations. Services offered include application development, call centers, voice transcription and server back end management. Nevertheless, prevailing political instability compounded by sporadic social unrest has led some US companies to reconsider IT outsourcing there. The Filipino labor force is also not as technically educated and savvy as India and China. Moreover, the distance between the US and The Philippines and thus the wide difference in time zone is a major hindrance.
Then there is Vietnam which is a budding destination for IT outsourcing management. But like the Philippines, its major barrier is the lack of technical knowledge in its workforce- there are not very many IT experts as would be required to support both local and overseas businesses. This means employing a local IT expert can be expensive.
Daven Michaels Author of the book Outsource This!