Rising Asian BPO destinations

Wednesday, 26 November 2008

While India has been a dominant outsourcing destination, several companies (Indian and global) are looking at destinations other than India to set up their development centers. Apart from India, other preferred destinations are China, Vietnam, Malaysia, Philippines. Wipro, TCS, Infosys, Satyam, WNS and Cognizant are setting up development centers in Australia, China and Japan to serve the Asia Pacific market. According to PAC, 20 of UK’s largest IT services suppliers have opened 21 global delivery centers since January 2007. Of these, only two are in India. These large IT services suppliers include EDS, IBM, Fujitsu, Capgemini, Capita, Accenture, CSC, HP, BT Global Services and LogicaCMG. Some of the recent expansions in Asia (excluding India) include: Essar Group’s Aegis BPO has bought People Support and plans to expand its contact center business in the Philippines, Costa Rica and the United States. Genpact has expanded to the Philippines and made an extensive presence there. Citibank and ExlService service holdings also have a presence in the Philippines. Norway-based Petroleum Geo-Services ASA has its data processing center in Malaysia, its second largest processing center after Houston. Outsource Partners International recently opened a finance & accounting service center in Malaysia. There is a shift in focus towards Europe and Asia Pacific thus necessitating setting up centers there. Given the uncertain market conditions, companies are looking to mitigate risks and set up centers in multiple countries. Moreover, the slump in the US market is putting pressure on the margins, forcing Indian BPOs and multinational companies to diversify their client base.   Amongst Asian countries, the Philippines and Malaysia are aggressively promoting themselves as attractive outsourcing destinations. Recently, ValueNotes signed a deal with Outsourcing Malaysia at the first-ever outsourcing conference in Malaysia, held earlier this month. Outsourcing Malaysia (a consortium of outsourcing companies in Malaysia) has partnered with ValueNotes for providing market intelligence. According to David Wong, chairman of Outsourcing Malaysia, “There is still a lot of untapped potential in the outsourcing industry in the country. Our shared services and outsourcing sector is growing at twice the global rate of 15 per cent and we have every potential to hit our target of US$2 billion (RM7 billion) by the year 2012.” According to Neeta Joshi, Head - Business Development, ValueNotes Outsourcing Practice, “Malaysia is a promising outsourcing destination. Our partnership with Outsourcing Malaysia will help the country showcase its outsourcing capabilities to a global audience. We hope to provide a range of research products for Outsourcing Malaysia.”

 

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