Source:www.vnunet.com

Chinese cities will overtake their Indian rivals as the top destinations for offshore IT delivery by 2011, predicts analyst IDC.

Substantial investment in infrastructure, internet connections, technical skills and improved English language skills will result in China moving ahead, says IDC’s inaugural Global Delivery Index report.

But India is unlikely to give up its crown as the offshoring destination of choice easily, with new figures showing its IT software and services market has exceeded expectations to grow by more than 30 per cent in the past year.

Indian IT trade association Nasscom predicts sales will continue to rise, from £19.3bn in 2006/07 to almost £25bn in 2007/08, an increase of up to 27 per cent – see research world, below.

Affordable rent, low-cost labour and language skills are some of the reasons companies still choose to set up offshore delivery centres in India.

But Nasscom president Kiran Karnik admits there are some short- and medium-term challenges to be addressed, including rupee appreciation, suitability of available talent and infrastructure development.

IDC’s survey compared 35 cities in the Asia/Pacific region as potential offshore delivery centres. Bangalore and Mumbai remain the leading destinations, but Chinese cities such as Shanghai and Beijing are on the rise, says IDC research manager Conrad Chang.

‘There are different risk factors to consider when evaluating outsourcing, offshoring, onshoring, and nearshoring,’ he said. ‘Often what differentiates leading cities is their focus on deal-clinching factors.’

Source: VNECONOMY

An online article for CNET News has predicted that Viet Nam is to become a more popular outsourcing destination than both China and India within the next five years.

The tip was made on July 10 by Harvey Nash, a British recruitment company that recently acquired Ho Chi Minh-based recruitment business SilkRoad for 1.8 million USD.

The recruitment company said Viet Nam has the second-highest gross domestic product growth after China and the country is now the third-largest offshore-services destination in Southeast Asia.

The emerging position of Viet Nam as a new outsourcing hub was firmed up by a fast-growing information technology work force. The country’s labour pool has about 80,000 IT graduates with some 9,000 more graduates added every year.

More than half of Viet Nam’s 84 million population is under 25 years old and the number of science-majoring students account for 83 percent of the total number of graduates.

“With a growing and youthful IT workforce, low costs and high aspirations to develop its software services, Viet Nam is a natural offshore location and has all the ingredients to become the leading market choice in the next few years,” said SilkRoad CEO Marc Voss in a recent statement.

Companies already outsourcing IT services to Vietnam include Honda Motor and Intel, the world leading chip producer that just invested 1 billion USD in a chip factory in southern Viet Nam.