July 04, 2007 || Global Delivery Index:

Chinese to Overtake Indians in Offshoring by 2011

An IDC offshoring trend report, based on a new comprehensive set of criteria such as cost of labor, cost of rent and language skills, found that Indian cities are highly ranked while Chinese cities are on the rise and nipping at India’s heels.

IDC said examples of the cities covered in its new Global Delivery Index (GDI), which compares 35 cities in the Asia/Pacific as potential offshore delivery centers, include Adelaide, Bangalore, Dalian, Hanoi and Kuala Lumpur, among many others.

Conrad Chang, IDC research manager, explains there are different risk factors to consider when evaluating outsourcing, offshoring, onshoring and nearshoring. “Some factors are obviously more critical than others and the GDI takes that into consideration,” Chang said. “Often times what differentiates leading cities from the rest is their focus on deal-clinching factors and the GDI weighs that more heavily than other factors.”

According to IDC, Chinese cities will overtake Indian cities by 2011 due to massive investments made in infrastructure, English language, Internet connections and technical skills, which are favorable towards offshoring. IDC said other issues exist, such as confusion about offshoring, onshoring, nearshoring and how to leverage different delivery methods for optimal results.

In addition, is India the only viable option and what are the other alternative global delivery centers and how to objectively compare and quantify risks between different locations, for example, is Bangalore better than Dalian?