By Nick Heath, 20 February 2009 15:22
NEWS
Forget Chennai and Mumbai - the outsourcing hubs of tomorrow will be in Belfast and Brisbane.
An eclectic mix of 31 cities, in countries ranging from Australia and Ireland to areas in South America and Africa, will challenge today's best-known outsourcing centres in India and China, according to advisors at KPMG.
Faced with overburdened telecoms infrastructures and overstretched labour markets in traditional offshore locations, cities including Brisbane and Belfast are among the alternatives that should be considered by companies, the KPMG report says.
Belfast makes the grade for its strong schools and universities, its young population, high number of IT graduates and cheap operating costs, while Brisbane has a large talent pool, a multilingual workforce and employee costs that are 10 to 15 per cent cheaper than other Australian cities.
According to Shamus Rae, advisory partner at KPMG in the UK, the credit crunch will drive more companies to outsource IT and business processes, which will in turn hasten the search for new cities to host these services.
The report found that the new cities in Asia-Pacific offer lower costs, younger populations and government incentives such as easy work permits, while those in Europe, Middle East and Africa promise robust telecoms and power infrastructure and niche specialisms in fields such as data management.
Meanwhile cities in the Americas can draw on large labour pools, a more mature service offering, proximity to a major client base and multiple language skills.
Size is not a deciding factor among these emerging cities, with the tiny Port Louis in Mauritius with a population of just 130,000 making the KPMG list alongside the metropolis of Buenos Aires, home to almost 13 million people.
A more important factor is the proportion of computer graduates, the number of research and development institutions, the rate of migration to the cities and common languages with their target markets.
Comments
There are 4 comments. Join the discussion
1. trafficmills
really don't agree with the short story here. All we have is a list of places and nothing to quantify or qualify the information as true. In all honesty, we choose and always win, using people in the Philippines. The people work with heart, speak English and only require $200-$600 a month for full time salaries, which we are extremely happy with.
2. Ellen O
Oh what nonsense. The cost differential between Bangalore and Brisbane is such that Brisbane could never compete with India.
If Brisbane was so attractive why don't Aussies in Sydney and Melbourne outsource to Brisbane?
3. David
I think what you guys who have already commented on are missing is that Brisbane is mentioned primarily because it compares favorably with Sydney and Melbourne in terms of talent and cost of personnel. It won't compete right now with Chennai or other centers in India, however the cost of personnel in those places is going up and the infrastructure to support further expansion simply isn't there. Brisbane by contrast is we connected to the rest of the world, specifically the rest of the Pacific rim and the US, where most of this business will come from. Besides, anyone that thinks this isn't a moving target is smoking some good stuff. I won't be moving back there anytime soon, just to take a paycut ;-)
4. anonymous
A recent book published by Bob Kennedy reinforces your views that one major factor contributing to the increase in offshoring is the resources (human talent) available inother regions. Although many residents of the US want to blame government or big business I believe there are many other factors that have contrinuted to the economic situation.