India Still Top For IT Offshoring, But Others Catching Up

India remains the top destination for companies moving information-technology services to lower-cost economies, but China, Russia and Brazil are catching up, said a report released Dec 11. Research firm Gartner also said offshore spending will grow 60 percent in Europe and 40 percent in the US next year in a boost to countries such as India that are dependent on Western economies for IT revenues. The analysis showed that India remains the undisputed leader in offshore services, but increasingly countries such as China, Russia and Brazil are providing credible alternatives.

India, led by software firms such as Tata Consultancy, Infosys and Wipro, has leveraged on a vast engineering talent pool and labour costs that are a fifth of those in the West to build itself into the world''s back-office. Gartner used 10 criteria to rate potential locations for IT services, including language, government support, labour pool, infrastructure, educational system, cost and political and economic environment.

Cultural compatibility, global and legal maturity, and data and intellectual property security and privacy were also factored in. The aim of the study was not to rank each country, but rather help sourcing managers determine which locations are right for their organisations. China, India and Singapore all had strong government support for the promotion of their country as an offshore services location. The political and economic environment remains a concern for many companies when moving work to offshore locations and so Pakistan, the Philippines, Sri Lanka and Vietnam rated poorly, Gartner said.