China Makes Headway In Outsourcing
September 26, 2010
Outsourcing has turned out to be a controversial subject but it has taken a lot of significance in the wake of a recovery as firms are looking to cut costs. So far, India has dominated the outsourcing landscape with outsourcing giants like Infosys, Wipro and Tata Consultancy Services. However, things are changing post recession. There have been a number of competitors that are giving Indian outsourcing firms a run for the money.
China, Philippines, Latin America and even Eastern Europe have been some of the major players in outsourcing recently. But China is now headed to lead this group of nations as the world’s powerhouse in outsourcing. Some of China’s impetus for outsourcing stems from the government support that Chinese firms are receiving to undertake offshoring.
According to analyst Ovum, China’s outsourcing firms are in stiff competition with India. Recently, analysts had warned that there would be a possible overtaking of India’s outsourcing business by its Chinese counterparts. Outsourcing to China is likely to play a big part in offshoring. Some of the issues plaguing the Indian outsourcing industry include problems with infrastructure, and increasing wages. Not just that, the Indian outsourcing industry is also finding it difficult to retain employees. These are some significant causes affecting the decline of India’s shared services and outsourcing (SSO).
Compared to 2009, when outsourcing to India was at its peak, China was only in the top five rankings at the time. But that has changed. Now the outsourcing industry is looking at a two horse race to the finish line with India and China competing head to head. This trend is likely to continue in the near future as firms come out of the recession seeking to reel in profits during a recovery in the offing, reports ZDNet Asia.