India, China and Eastern Europe – Hotspots in Outsourcing

Jacob Cherian May 05, 2010

The modern business world has evolved into a complex array of supply chains with firms in the U.S. and U.K. turning to host of other locations to outsource various operations. Some of these outsourcing tasks involve software development firms, top seo companies and top web design companies.

With increased and efficiency and lower costs, outsourcing is transforming into a mainstay phenomenon for business operations. Consequently, several outsourcing destinations are revealing signs of improved growth, while some are, in essence, turning into hot spots for outsourcing.

Among the two biggest players in the outsourcing market are India and China – both countries have large pools of skilled workers and offer cheap labour. Along with these two largest emerging markets, Eastern Europe is also a favored location for outsourcing with Poland revealing significant capacity to transform into an outsourcing hub in the region.

John Blascovich, A.T. Kearney’s Assessment of Excellence in Procurement, had anticipated in an early study that these regions would once day see increased demand. When the finding was published in 2005 he wrote, “The number of companies sourcing from China, Eastern Europe and India has increased significantly in the last five years and will continue to rise in the future,” reports supplychaindigital.com,

Blascovich speculated that by 2009, 72 percent of firms would be outsourcing to China. This figure is a steep climb from a mere 30 percent ten years earlier. Backing up these sentiments, a recent study by Gartner showed that India and China are the two biggest giants in offshore outsourcing. The report goes on to say that nations in the Asia Pacific region have also strengthened their positions. India has been listed in the top ten leading locations for Offshore Services in Asia Pacific and Japan in the current year, while the Philippines, Vietnam and Malaysia are stiff rivals in the field. Along with these countries, Indonesia has made its entry into the top ten list for the first time.

Research vice president, Gartner, Jim Longwood, said in a statement, “Some of these countries have invested considerably and leveraged increased demand for lower cost services.” Adding, “The global financial crisis forced many organizations to place a greater emphasis on cost optimization.”