Diversification Strategies See the Emergence of Alternative Offshore and Nearshore Delivery Locations, says IDC
Government support to build out ICT infrastructure and the increase in the number of graduates with appropriate skills sets are factors helping to accelerate China on the maturity curve. Since the Chinese cities are not completely mature in terms of services offerings, there are still significant opportunities that exist for growth.
IDC sees Chinese cities such as Chengdu and Shenzhen creeping up to take positions in the top 10 optimal locations for offshore global delivery by 2013. Bangalore on the other hand, which is struggling with growing demands on both ICT and non-ICT related infrastructure and increasing costs, is expected to give way to some of these Chinese cities by 2013.
Of the nearshore locations, Brisbane continues to be the destination of choice but Kuala Lumpur is expected to move up the ranks to overtake Dalian for nearshore outsourcing by 2013.
With strong support from the government in terms of tax incentives for the organizations, Multimedia Super Corridor Program, the Foreign investment Committee (FIC) focused on liberalization to make Malaysia more competitive, and lower labor costs in comparison to Singapore, Kuala Lumpur is well set to provide near shore services for the region.
"In light of the events such as the economic downturn and terror attacks, moving forward, global delivery will not just be a cost consideration, but a more extensive balance between cost, skill set and political stability offered by the locations. There is an increasing emphasis on value as opposed to pure costs," IDC adds.
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