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GLOBAL LOCATION INSIGHTS – DECEMBER 2009
 
 

Global Location Insights – What Does 2010 Hold in Store?

The ripple effects of the global economic slowdown made 2009 an interesting year for outsourcing and offshoring. Rapid growth in offshoring slowed in 2009, despite the fact that the trend of high wage inflation in offshoring markets diminished significantly. With a revival in the locations landscape in the last three months, 2010 promises to be an interesting year with more activity. This research note outlines three key location trends we expect to see in 2010.

Buyers will increasingly move towards globally integrated delivery networks

As buyers’ focus shifts to cost reduction, low concentration risks, and improved productivity levels in the future, they will tend to seek greater flexibility in service delivery models. This is already manifesting itself in multi-geography, hub-and-spoke models. In 2010, we expect to see an increasing number of buyers push towards globally integrated networks where locations both complement and supplement each other

Traditional offshore locations such as India and Philippines will continue to grow as “hubs”

India and Philippines will continue to be the hubs of activity in 2010 owing to low-cost, large scale, highly skilled talent pool. In the last 12 months, they accounted for nearly 40 percent of new delivery centers set up globally (see Exhibit 1)

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Exhibit 1: New service delivery set-ups – third-party and captive are significant in all geographies

    

Industry news

  • HCL opens a global IT development center in Sao Leopoldo, Brazil... more
  • Wipro inaugurates its global delivery centre at Chengdu, China... more

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Research

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Webinars

December 10, 2009 – Emerging Market Suppliers: Understanding the New Landscape to Mitigate Risks

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Industry news

  • HCL opens a global IT development center in Sao Leopoldo, Brazil offering a range of services including Enterprise Application Services, Custom Applications Development and Maintenance, and Remote Infrastructure Management to clients primarily in Latin America, North America and Europe. The company expects to hire over 300 engineers to work at the center by 2012
  • Wipro inaugurates its global delivery centre at Chengdu, China to provide IT&BPO services to its customers in English, Chinese and Japanese. The center will initially focus in the first year on Testing and Enterprise Application Services for the Manufacturing and BFSI Industries
  • Genpact announces the opening of a new remote operations center in Hyderabad, India to provide secured application and infrastructure monitoring and support services to clients worldwide
  • Firstsource expanded its operations in Northern Ireland by adding another 100 employees to its existing pool of 1,000 in Londonderry and 400 in Belfast
  • Infosys Technologies opens second Latin America IT development Center in Monterrey, Mexico, offering global, near-shore and Latin American clients a range of IT services including Business and IT Consulting, Packaged Business Solutions Implementation and Infrastructure Management
  • State government Karnataka, India initiated the process of creating the third Information Technology hub in Bangalore city near its new airport with an investment of Rs 100,000 Crore
  • Northgate Arinso expands its global HR service delivery network in Manila, Philippines to service the growing HR needs of the region. The center will have 235 employees offering human resource and back-operations with the capacity to double by end 2010

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Overview of Location Optimization

Everest Research Institute provides actionable insight and visionary research on a wide range of offshoring issues through its Location Optimization practice (LO). Our Location Optimization research covers multiple regions and issues relating to offshoring locations, with a focus on helping companies assess the trade-offs of choosing between alternative locations. Our Location Optimization team combines deep subject matter expertise with broad analytical skills and insight into the global sourcing market, all of which are based on years of experience working in the offshoring industry.

For more information, contact us at:

info@everestresearchinstitute.com
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UK: +44-87-0770-0270
 
     
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