According to Frost and Sullivan’s 2006 Survey, Indian IT sector is under pressure from Chinese and other upcoming potential outsourcing hubs of the world. The survey suggests that India’s lead over China in outsourcing is narrowing. The reasons that were cited by the research firm are the ones that are well known.
Poor Infrastructure, High attrition rates, Sky rocketing wages of IT workers !
Findings from the reports were:
According to its 2006 global outsourcing survey, Frost & Sullivan said India was the top hub, followed by China, Ireland, Singapore, Malaysia, Mexico, the Czech Republic, Poland, the Philippines and Canada.
The survey reviewed some 300 multinational firms in seven sectors: financial services, technology, health care, fast-growing consumer goods, transportation, energy, and media and entertainment.
When respondents were asked to choose their top three outsourcing hubs, India scored 2.25, China 1.76 and Ireland 0.77.
Although India is churning out more than 3 million graduates every year, demand for experienced professionals in India is outpacing supply, leading to attrition levels of up to 40 percent or higher, especially in the Information Technology sector.
Due to this gap, other upcoming outsourcing countries are looking to grab the share of consolidating Indian outsourcing market.
The question is whether other countries have the ingredients to do successful outsourcing work?
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Author: Arun Prabhudesai
Arun Prabhudesai is founder / chief editor at trak.in. He jumped the Entrepreneurship bandwagon in early 2008 after a long 13 year stint in I.T Industry. You can follow him on twitter @trakin or get in touch with him at admin-at-trak-dot-in or 91.9822575676.Related posts:
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{ 4 comments… read them below or add one }
If this situation will continue for long then what will happen to the indian economy , the recent upsurge in the indian economy was because of a lot many factors and the outsourcing industry had a major role to play in it.If this situation mentioned out here will continue then what will be the after effects? Will India be able to achieve the kind of development rate which they have thought of?.
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Induia has such a stong hold on it outsourcing i realyl don’t see how any new comers could really do much damage. They all ready have the most rediculously low wages, and fees. Labor has to cost something, so I’m not quite sure how the chiense plan to out compete when it comes to it outsourcing fees ???
I can see the rapid growth of outsourcing in the Philippines but I don’t consider this as a big threat for Indian community. Philippines is incredibly increasing outsourced laborers percentage but still I give the title to India. India has been known to be the ‘mother of outsourcing’ globally and probably it will take several more years before we take-over India. Although, it is very rewarding to know that high percentage of Filipinos are being outsourced. This means a lot to Filipino families.
Being in US since 6 months,and seeing the economic meltdown and jobloss and mortgage foreclosures,at an alarming scale, I feel outsourcing in all areas is going to shrink . When the present outsourcing contracts end or when companies in US go out of business….the real impact will be seen in India and elsewhere
Some well informed persons say India is a preferred destination compared to other countries. Yes that is the edge for some more time. If economy improves here, then it will slowly improve outsourcing.
One should be optimistic and keep waiting