Japanese and Korean outsourcers are flocking to
China, which is gaining attention as a hot spot.
Dalian, ranked 14th on Tholons’ 2014 Top 100 list,
is known for its high-value IT outsourcing services.
But organizations outside of Asia have been slow to
embrace China as an outsourcing destination.
“China is a dark horse for the near term,” Mr.
Ravago says. Although Chinese vendors can deliver
high-value services and the government has been
aggressively expanding English-language training
programs for students, many outsourcers avoid the
country because of perceived intellectual property
risks and concerns about transparency and the
political environment. “It’s a complicated country,
but it’s proven that it can be a good outsourcing
destination,” he says.
INDIA AND THE PHILIPPINES
India and the Philippines continue to be the top destinations for outsourced projects. Vendors in these countries are viewed as capable
of handling the largest-scale projects at optimal—if not always lowest—costs. To keep budgets in check, many vendors in these nations
are expanding into second-tier cities.
Eight of Tholons’ top 10 outsourcing destinations are in India
(Bangalore, Mumbai, Delhi, Chennai, Hyderabad and Pune) and
the Philippines (Manila and Cebu City), and other cities in both
countries rose in rank compared with previous years, Mr. Ravago
says. Both countries boast experienced vendors, millions of English
speakers and stable governments, he notes, but one risk to consider
is environmental disasters. When Typhoon Haiyan struck less than
100 miles (161 kilometers) from Cebu City in November 2013, a lot
of outsourcing companies got nervous. “It’s a risk that could affect
your outsourcing engagement,” Mr. Ravago says. “A PMO needs to
be aware of it.”