Thursday
Best Countries For Outsourcing
Lisa DiCarlo
By 2015, analysts predict that more than 3 million white-collar jobs in the U.S. will be farmed out to other countries, up from about 300,000 today. If that shift is inevitable, the next question becomes which countries offer the best choice. Here, we will provide some guidelines to help answer that question.
India | Phillipines | Russia | China| Canada | Mexico | Ireland
Outsourcing generally refers to the practice of farming out jobs from their home base to other countries, largely in an effort to cut costs. Many American companies are now transferring technology development, customer service, financial and administrative jobs to international markets. The move parallels the dramatic shift of manufacturing jobs outside U.S. borders.
"Twenty years ago we stopped putting a premium on assembling products," says analyst John McCarthy of Forrester Research in Cambridge, Mass. He suggests that many corporate functions are likewise becoming commoditized and therefore don't require a highly salaried workforce.
Companies like Citigroup and General Electric were pioneers, having established specialized centers in other countries and sending ever more complex and critical functions outside the U.S. Companies like IBM acknowledge the trend and are reportedly hastening efforts to move jobs outside the U.S. before its competitors do.
India is the leading recipient of the outsourcing of information technology functions like software development and maintenance, and also business process outsourcing. The latter includes back-office functions like accounting, human resources, call centers and data analysis.
Like manufacturing before it, outsourcing will fall into a tiered structure. Writes McCarthy, "Simple, base-level back-office payroll and data entry will go to rock-bottom-wage countries like Vietnam and Uruguay over time, and countries like India will move up the food chain and take on more complex software and product development services."
Here we provide a top-level assessment of seven countries that currently provide the best alternatives for U.S. companies. The data is based on information gathered by the A.T. Kearney division of Electronic Data Systems, which compiled its data from the Bank of America, Gartner Group, International Data, International Country Risk Guide, World Bank and World Markets Research Center. Data for our assessment were also provided by neoIT, a global outsourcing advisory firm.
By 2015, analysts predict that more than 3 million white-collar jobs in the U.S. will be farmed out to other countries, up from about 300,000 today. If that shift is inevitable, the next question becomes which countries offer the best choice. Here, we will provide some guidelines to help answer that question.
India | Phillipines | Russia | China| Canada | Mexico | Ireland
Outsourcing generally refers to the practice of farming out jobs from their home base to other countries, largely in an effort to cut costs. Many American companies are now transferring technology development, customer service, financial and administrative jobs to international markets. The move parallels the dramatic shift of manufacturing jobs outside U.S. borders.
"Twenty years ago we stopped putting a premium on assembling products," says analyst John McCarthy of Forrester Research in Cambridge, Mass. He suggests that many corporate functions are likewise becoming commoditized and therefore don't require a highly salaried workforce.
Companies like Citigroup and General Electric were pioneers, having established specialized centers in other countries and sending ever more complex and critical functions outside the U.S. Companies like IBM acknowledge the trend and are reportedly hastening efforts to move jobs outside the U.S. before its competitors do.
India is the leading recipient of the outsourcing of information technology functions like software development and maintenance, and also business process outsourcing. The latter includes back-office functions like accounting, human resources, call centers and data analysis.
Like manufacturing before it, outsourcing will fall into a tiered structure. Writes McCarthy, "Simple, base-level back-office payroll and data entry will go to rock-bottom-wage countries like Vietnam and Uruguay over time, and countries like India will move up the food chain and take on more complex software and product development services."
Here we provide a top-level assessment of seven countries that currently provide the best alternatives for U.S. companies. The data is based on information gathered by the A.T. Kearney division of Electronic Data Systems, which compiled its data from the Bank of America, Gartner Group, International Data, International Country Risk Guide, World Bank and World Markets Research Center. Data for our assessment were also provided by neoIT, a global outsourcing advisory firm.
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