Cebu joins list of top 10 emerging outsourcing centers in the world

First take a look at the list. Don't expect Bangalore, Mumbai, Delhi, Gurgaon, Noida in the list because they are already established centers and the list is all about top and best 10 emerging outsourcing centers in the world. The study is done by services globalisation & investment advisory firm Tholons and media group Global Services.

Rank

1. Chennai (India)

2. Hyderabad (India)

3. Pune (India)

4. Cebu City (Philippines)

5. Kolkata (India)

6. Ho Chi Minh City (Vietnam)

7. Colombo (Sri Lanka)

8. Shanghai (China)

9. Chandigarh (India)

10. Beijing (China)

In an interview with Sun.Star Cebu, Cebu Investment Promotions Center (CIPC) executive director Joel Mari Yu said he expects Cebu to reach number one, as the business process outsourcing (BPO) industry here is rising compared to that in India.

Costs are surging in the prime cities in India, which has earned a reputation as the world’s back office, as property values and rentals rise and wages increase at an annual pace of more than 15 percent amid a shortage of skilled employees.

Indian outsourcing firms are also feeling the pinch from an appreciating rupee, which dents dollar-billed earnings, forcing them to cut costs by expanding to less expensive locations.

“With the demand-supply gap widening, newer tier II cities will play a critical role in reengineered globalization models,” said Tholons chairman Avinash Vashistha.

“Destinations will need to provide a greater level of cost effectiveness and operational efficiency.”

Kolkata at number five and Chandigarh at number nine were the other two Indian locations on the list, which contained three Chinese and two Vietnamese cities as well.

The three hot cities for outsourcing from China were Shanghai at number eight, Beijing at 10 and Shenzhen at 13. Ho Chi Minh City and Hanoi were put at number six and number 12.

The Sri Lankan capital of Colombo placed seventh, Cairo at 11, Buenos Aires at 14 and Sao Paulo at 15, the study’s sponsors said in a statement released in Bangalore yesterday.

The list is based on criteria such as scale and quality of workforce, financial infrastructure, risk environment and quality of life.

India’s outsourcing companies have thrived by winning work from companies in the United States and Europe that sought to tap the country’s low costs and large employee pool by handing over jobs ranging from answering customers’ calls to risk management and financial analysis.

Pure-play outsourcing firms account for about 10 percent of the $50 billion in revenue logged in the year ended March by the entire information technology industry, which also includes software giants such as Tata Consultancy and Infosys.

Yu said that among Third World countries, the Philippines has an edge in that Filipinos speak better English, or that which is closest to the American twang, compared to Indians, who have an accent.

But, he said, the government should start giving the industry more attention in policy direction to keep that advantage.

“It would be better that the industry would not be concentrated in Cebu alone but in other provinces as well so that qualified workers do not congregate in Cebu. And this entails better government planning involving other local government units,” Yu said.

In particular, he said, other places should offer English, computer technology and other information technology-related courses for a better-qualified pool of workers.