Six new outsourcing hotspots for 2009

Companies looking to cut costs through outsourcing can now look way beyond Bangalore, says Ian Wylie.

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Last Updated: 09 Oct 2013

Outsourcing is one business that is booming, thanks to the global economic slowdown. After all, offshoring 'non-core' and 'location-agnostic' activities such as IT, customer service, payroll and even some HR functions to a low-cost, high-skilled developing economy is a great way of saving a lot of money without, as they say, 'negatively impacting your service set'. At least in theory.

And according to a report published by KPMG, Exploring Global Frontiers, firms are now looking beyond the usual outsourcing suspects such as Bangalore and Chennai towards a new generation of even lower-cost, higher 'value-add' destinations. Places where it might be possible to outsource not just call centres and number-crunching jobs, but even more high-end functions - R&D, for example.

So to help you keep up to speed and ahead of the competition, here's MT's guide to the pros and cons of a few of the new, new outsourcing centres. You might want to have your atlas handy, as some are pretty out-of-the-way places: but remember, you saw them here first.


GDANSK, POLAND

How to find it: On the Baltic coast, an hour's flight from Warsaw.

Vital stats: Population 458,053, rainfall 60 cm, literacy rate 99.8%, Polish, English, German, Russian spoken.

The good: Strong foreign-language skills, infrastructure improvement projects planned for European Football Championship in 2012.

The bad: Emigration has depleted workforce size. It's prone to flooding.

Already there: Lufthansa, Intel, Reuters.

Don't mention: Michael O'Leary. Dismissing expansion into eastern Europe, the Ryanair boss said: 'Take Gdansk. Who wants to go to Gdansk?' But it quietly appeared on Ryanair's route map a year later.

Call-centre script: 'Niestety, pani. Obawiam sie, ze komputer jest na gwarancji ... ale moge dac Ci wiele dobrego hydraulika.'

Translated 'Sorry, madam. I'm afraid your computer is out of warranty ... but I can give you the number of a good plumber.'


CAIRO, EGYPT

How to find it: In the north of Egypt on the banks of the Nile, five hours' flight from London.

Vital stats: Population 18 million, rainfall 20 cm, literacy 71.4%, Arabic and English spoken.

The good: Pro-Western attitude, strong culture of customer service, thanks both to history and tourism. Cairo University is one of the biggest in Africa.

The bad: Soaring inflation, high pollution, aggressive drivers, random acts of terrorism and political violence.

Already there: Fujitsu, Orange.

Don't mention: Tutankhamun - cursed, apparently.

Translated: Please press 1 for sales, 2 for service and repairs, 3 if you're thinking of cancelling your subscription, 4 if you'd like to upgrade to a new service, 5 if you have an enquiry about your bill, or 6 if, by now, you've lost the will to live.'

 

HO CHI MINH CITY, VIETNAM

How to find it: On the Saigon river, two hours' flight from Hanoi.

Vital stats: Population 5,244,700, rainfall 180 cm, literacy 99%, Vietnamese, Chinese, English and French spoken.

The good: Large, young talent pool, low salaries and cost of living.

The bad: Lots of petty crime (eg, pickpocketing), noise and air pollution, limited public transport and appalling traffic.

Already there: Oracle, Luxoft.

Don't mention: Gary Glitter.

'Hay noi chuyen mot chut lau hin. Toi khong di bat cu nii nao - ban co thoy l'u l'ong truy cap tren mang?'

Translated: 'Let's talk a bit longer. I'm not going anywhere - have you seen the traffic out there?'

 

PORT LOUIS, MAURITIUS

How to find it: Capital of Mauritius, a four-hour flight from Jo'burg.

Vital statistics: Population 130,050, rainfall 150 cm, English and French Creole spoken, literacy 86%.

The good: Positioning itself as an international financial services centre and specialist in disaster recovery; low corporation tax, beautiful beaches.

The bad: Water pollution, prone to cyclones between November and May; do you really want to outsource to a country where the national emblem is the dodo?

Already there: Orange, Microsoft.

Don't mention: Diego Garcia - several thousand islanders were dumped on Mauritius in the early 1970s, when Britain gave Diego Garcia to the US to use as an airbase.

'Oh desole, monsieur, je ne savais pas que vous etiez encore sur la ligne. Quand j'ai dit a mon collegue, vous avez ete un idiot, ce que je voulais dire a ete ...'

Translated: Translated 'Oh sorry, sir, I didn't realise you were still on the line. When I told my colleague you were an idiot, what I meant was ...'

 

BRISBANE, AUSTRALIA

How to find it: East coast of Australia, an hour's flight from Sydney.

Vital stats: Population 1,857,594, rainfall 115 cm, 52.6% literacy*, English, Chinese and Italian spoken.

The good: Lower employee costs than Sydney or Melbourne, growing reputation for gaming development, and grants of up to 100% of payroll and land taxes.

The bad: Occasionally subject to bushfires, floods and severe storms. And crocs.

Already there: Sony, Electronic Arts, Nintendo.

Don't mention: John Molony, a mayor elsewhere in Queensland, who compounded the state's sexist image by suggesting last year that 'beauty-disadvantaged' women should flock there, because its miners and cowboys aren't too fussy.

G'day, cobber. Fair dinkum, this job of ours is hard yakka. We put in more hours than the Prime Mincer! Surf's a real bewdy this arvo, so I'm off for a ripper of a time.'

Translated 'We value your call. Please call back later.'

 

CLUJ-NAPOCA, ROMANIA

How to find it: North-western Transylvania, 50 minutes from Bucharest.

Vital stats: Population 310,243, rainfall 59 cm, literacy rate 97.3%*, Romanian, Hungarian, English, French, German spoken.

The good: Large student population, multi-lingual.

The bad: Relatively high cost of living, pollution, torrential rain.

Already there: Nokia, Orange, Vodafone.

Don't mention: Street racing. Cluj-Napoca has become a popular venue for illegal road races.

'Multumesc, in picioare, pentru a fost infiintat. Mai e ceva ce va poate ajuta cu azi? O sticla de sange a lui Dracula-vin rosu, poate? Set de Vlad Tepes cutite friptura?'

Translated: 'Thank you, your standing order has been set up. Is there anything else we can help you with today? A bottle of Dracula-blood red wine, perhaps? Set of Vlad the Impaler steak knives?'

*Persons aged 15 years and over with a qualification.

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