Russia, Philippines may offer India stiff competition in outsourced jobs

The Philippines and Russia may be behind India currently in the IT outsourcing market, but might give it stiff competition in 2007, says a report.

In 2007, both the countries will continue their growth as outsourcing locations, said offshore advisory and management services firm NeoIT.

This is expected happen in the year 2007, which will see companies significantly scaling up global services operations to accelerate transformation. An overall growth of 25-30 per cent will translate into emergence of new offshore and nearshore locations with hard-to-ignore players, Mergers and Acquisitions and scaling up of capabilities.

"Year 2007 will see Russia emerging as a strong contender in the IT outsourcing market. It is currently the third largest IT outsourcing market behind India and China," it said.

Russian IT companies specialise in high-end software and embedded software product development, which acts as a differentiator from low-prices offerings from Indian companies. "We expect Russian IT offshoring industry to grow at 40-50 per cent in 2007," said the report.

The Philippines is providing excellent English language skills and that plays a key role in business process outsourcing. It competes very strongly with India in voice-based processes. Its financial and accounting skills are also at par.

Indian IT and BPO have started setting up operations in The Philippines because of two major reasons — clients want to derisk and want second English location and attrition/ shortages of staff in India are starting to impact projects.

The ease in cultural affinity with the US are making it easier for Tier-II clients to attempt setting up captive centres in The Philippines.What may be the critical catalyst at this crucial juncture is aggressive regulatory incentives in The Philippines for captive centre operations. It will continue to benefit from the focus on portfolio management as buyers expand their services globalisation efforts.

The report also talks about a rapidly emerging European market where it said the market for global services will grow at a faster rate this year as some European enterprises have "proved the concept"and set an example for their peers.

With increasing maturity in nearshore delivery capabilities, European language speaking countries like Hungary, Czech Republic, Russia, Poland, Bulgaria and Romania shall support this trend.

With almost all major European delivery locations under the EU, it has become easier from a regulatory standpoint to get services to India, The Philippines and China and other low-cost locations depending on the language and culture-dependence of the service. — PTI