Gartner’s Top 30
Selecting offshore destination just got easier - Gartner has its new list now. While I am often skeptical about info you can get from Gartner reports, in particular in its application to small to medium sized businesses, I believe in its value as long as it’s taken with a grain of salt. “Determining the country or countries that are best placed to host offshore IT operations is a daunting task for many organizations, according to Gartner, Inc. This year, Gartner has assessed the suitability of 72 countries as offshore locations, and has announced its ‘Top 30’*. The analysis showed that the dynamic nature of the market has seen a number of countries position themselves as credible alternatives to the BRIC countries (Brazil, Russia, India and China)…“
“In 2008, Gartner’s top 30 locations for offshore services, by region, were:
- Americas: Argentina, Brazil, Canada, Chile, Costa Rica, Mexico and Panama
- Asia/Pacific: Australia, China, India, Malaysia, New Zealand, Pakistan, the Philippines, Singapore, Thailand and Vietnam
- Europe, the Middle East and Africa (EMEA): the Czech Republic, Egypt, Hungary, Ireland, Israel, Morocco, Poland, Romania, Russia, Slovakia, South Africa, Spain and Ukraine
Although only seven countries from the Americas appeared in the final list of 30, these countries are becoming an attractive proposition for the largest buying market for offshore services – the US. “
See more on Gartner Identifies Top 30 Countries for Offshore Services in 2008.
Also see good insight in NetworkWorld reaction By John Ribeiro India’s competitors catching up as outsourcing hotspots.
Mumbai terrorist attacks
Never during my visits to Mumbai I had a chance to stay in Taj Mahal; it was always booked solid. I am sure I won’t be staying in that symbol of luxury any time soon. As a matter of fact, I am not sure it will be as high in demand as it was for some time now. Terror atrocities are not new to India, as but till now they were mainly off the radar for many of US execs. Last couple days will change the landscape for a long time. As a matter of fact for many IT execs of my generation the word “Kashmir” has stronger association with Led Zeppelin than with ongoing unrest and terror. Of course there will be changes in hotel security and city security altogether, there will be strong government actions, and so on. Of course people will eventually forget victims and the horror inflicted on the city by well organized militias, yet traveling to Mumbai won’t be the same for a long time. The difference with emotional impact of slams and extreme destitution you see on the way from airport to a beautiful downtown and physical clear and present danger is huge. Today National Outsourcing Association (NoA) tells us not to travel to India unless we have to or at least think twice even though Nasscom said the country’s software and services companies remain fully operational. Tomorrow safety of your resources stationed in India or your business travel might become an ongoing concern. I have seen companies bow out of outsourcing engagements on less violent news.
IT Outsourcing ‘09 Predictions
Hip hip hooray, the crystal ball is unveiled, and early predictions for offhshoring are out - IT Offshore Outsourcing: Early Predictions for 2009. Looks like there will be more business coming to the offshore vendors despite all the economic turmoil. I bet the jury is still out, as a matter of fact, the survey of 230 CIOs must have taken some time to process and summarize. The figures we are seeing today (DOW at 7500) are based on the data which probably goes back at least a few months (when DOW was let’s say at 12000).
My predictions are on a negative side, nowadays more than before, I expect notable deflation of offshoring business that will hit hard small suppliers in particular. I am sure we’ll see a wave of unpaid invoices, team buy-backs, and price wars.
Finding local employees may become easier as well, and that’s has been one of strong offshore drivers. Especially considering that things are getting quite gloom and doom even in the IT employment heaven: California’s unemployment rate jumped to 8.2 percent in October, the highest rate in 14 years, just as a state fund that pays unemployment benefits was about to run out of money…
IT Budgets Will Go Up Or Stay Flat For ‘09
An interesting article in InformationWeek. The title is pretty bold and encouraging: IT Budgets Will Go Up Or Stay Flat For Most Companies In 2009. Looking outside from my window following the market indices I find it difficult to believe, but I certainly hope so. It would be nice to put the gloom and doom behind.
An interesting question here; will that translates to the same in budgets for offshore outsourcing? Most likely yes. The outsourcing market is fairly established and correlate well with spending in IT arena. The supply / demand balance of IT talent has not changed drastically and solid IT resources will remain one of the scarcest commodities.
On the other hand at the same time we hear that Wipro delays plan to open software center in Atlanta what is attributed to economic downturn.
So I guess we are still left to wonder what role will the recession play in offshore outsourcing? By the way, a great article on CIO.com Offshore Outsourcing: What Role Will the Recession Play?
About
The price one pays for pursuing any profession or calling is an intimate knowledge of its ugly side. [James Baldwin]
In IT outsourcing one does not need to go too far to get ultimately familiar with its ugly side. However, despite all disappointments and failures I honestly believe in offshore capacity and its positive impact on the industry. I’ve seen enough success stories to continue using offshore resources myself and recommend it to others. Offshore outsourcing is one of most powerful weapons in technical leaders arsenal. And like any other powerful weapon it requires careful handling and great deal of knowledge in its use and application. Ugly enough even slight mistakes in its utilization could cost companies enormous pain and expense and technical leaders their reputation and career.
The goal of this blog is to bring to everyone involved in offshore outsourcing my 5 T’s – Thoughts, Tools, Tips, Tricks, and Traps of outsourcing. I hope you find it helpful.
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Tools & Links
Satyam Chairman Admits Huge Fraud
Satyam Chief Admits Huge Fraud … wow, you do not see those thing so often, and you wish you never did. I guess that puts Satyam’s chairman, Ramalinga Raju in the big league side by side with Madoff. I have done a lot of business with Satyam and am quite saddened by the news. Actually, Satyam has been under close scrutiny for quite some time now, especially after reports that the company had been banned from World Bank contracts for installing spy software on some World Bank computers. Satyam denied the accusation but in December, the World Bank confirmed without elaboration on the cause that Satyam had been banned. Also in December, Satyam’s investors revolted after the company proposed buying two firms with ties to Mr. Raju’s sons… Those deals were in fact a last-gasp attempt to fill a hole in its finances, falsely inflated for years by its founder and chairman. Inevitably stocks plunged closing at 39.95 or 78% down reminding everyone about Enron.
I still have a few friends working in the company and hope that these events do not affect them too harshly. The IT job market is far from perfect and who knows what is going to happen with gazillions of contracts Satyam had in the USA. Cisco already announced that “The recent unfortunate developments unfolding at Satyam are not expected to have any material impact for Cisco. At this point, we would not like to comment further and have full confidence in the government and regulatory authorities to address this matter as appropriate.” But what does it really mean in terms of the work which has been outsourced to Satyam; will all the contractors stay? Will they move on in a manner Arthur Andersen auditors ended up in KPMG? Or outsourcing altogether takes a huge hit?
It’s difficult to make any predictions now. I am afraid that this event will have profound and lasting negative impact on outsourcing in general as well as the entire Indian economy.
Is there any silver lining? Well, I am sure that there will be a lot of new business flowing to other top tire vendors across the world. Some smaller providers might get a chance to gain new business and get their hands on good employees in the feeding frenzy that’s likely to follow. And many companies on the buyer side will rethink their outsourcing policies and probably use this opportunity to renegotiate the contracts.
January 7, 2009 Posted by Nick Krym | News, Articles, Thoughts and Comments | Offshore Current Affairs | No Comments