Offshoring: India still No. 1
Summary
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The research analyst's Global Delivery Index (GDI) released this week indicated that India is still the offshoring country of choice. In its second edition, IDC's GDI ranks 35 cities in the region based on criteria such as labor and rent costs, language skills and political risk.
Two other Indian cities also made it to the top 10 list--New Delhi edged out Manila for the number two spot, while Mumbai dropped three places from last year's list to seventh.
Jenna Griffin, senior research analyst for global delivery services research at IDC Asia-Pacific, told ZDNet Asia that Bangalore and New Delhi were attractive due to existing infrastructure, large quantity of skilled workers as well as competitive pricing. She noted, however, that the appreciating rupee was eroding the cost arbitrage.
Auckland and Beijing made significant progress over last year, moving up five and three notches, respectively. Griffin said Auckland's ranking was influenced by factors such as greater government support, an increased emphasis toward a digital economy and currency depreciation.
On the other hand, the investment into Beijing's infrastructure and the environment for the upcoming Olympic Games has sharpened the city's competitive edge, she added.
Griffin said: "With prices on the rise in India, locations like Beijing with established infrastructure and lower costs will be in demand. Beijing also has a highly skilled workforce, supported by a strong education network."
The Chinese cities of Shanghai and Dalian were also counted by IDC as among the top 10 global delivery locations. Dalian, however, slipped from number four in 2007 to the current number nine.
Griffin said: "Despite scoring very well in terms of costs, Dalian has not scored as well in terms of skills and capabilities, and lacks the strength of infrastructure that some other competing locations have."
The analyst noted that Dalian receives support at a federal level as it is one of the cities identified under the Chinese Ministry of Commerce's 1000-100-10 project. However, support from local government also plays an important role. "[From that point of view,] other competing cities such as Beijing and Shanghai have an inherently stronger starting position," she added.
According to Griffin, there will be an increase in the number of Chinese cities considered as optimal global delivery locations by 2012. Xian, for instance, will become a top 10 offshoring destination for businesses.
In the short-term, the rise of Chinese cities will not have much impact on India, said Griffin.
She said: "Political support and the efforts of bodies like Nasscom (National Association of Software and Services Companies) are helping to keep Indian cities positioned as optimal global delivery locations.”
Talkback Most Recent of 12 Talkback(s)
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And yet thier quality has not improved
We tried a few software suites coming from Indian firms, not only did they not run with no execute turned on. They totally failed evaluations by metasploit.
I know not everyone has as stringent security requirements as the DOD, but they were not even willing to fix the problems.
Suicida|29th Jun 2008 -
Not worth the trouble
Even the Indians in our group (who are now Americans) groan whenever management suggests outsourcing. Almost everything we get back has to be redone.
The myth of getting three programmers for the price of one, is not very smart math when the three are all very inexperienced and without any desire to work hard. Add in the difficulty of communications twelve hours apart.
kdarling2nd Jul 2008 -
i agree with kdarling
I known a company that changed a whole office filled with indian programmers (50 or 60) with 10 overpriced but decent (local) engineer, not just they saved a lot of money also quality reducing the timeline, saving space and other advantage.
Also i known the case of to offshoring IT support, the response time raised from a few hours (during the day) to many weeks.
magallanes3rd Jul 2008 -
Improve thy quality first
Improve the quality of your spelling first, my friend. "thier"?
jim4u3rd Jul 2008 -
RE: Offshoring: India still No. 1
Its not the arrogance of Indians but the overconfidence of US or for that matter any developed nation coz of which this is happening. Asians just have grabbe the opportunity, and the US business houses dont see it stopping. And here the its coz of vast amount of money that they save. They dont care a damn for others, they just care for their money and thats the fact.
ctrl_shift_delete1st Jul 2008 -
I agree
Just look at sites such as freelancer.org and all you will find is Indian development teams making ridiculously low bids for jobs, making it impossible for US/UK freelancer to make a living.
Parassassin1st Jul 2008 -
Project Failure Rate Higher
The stats show that projects outsourced to India fail about 15% more than US Projects. Yet American companies continue to think they can save money by moving key projects off-shore. And that doesn't even address the issues of poor customer satisfaction with contact centers located there.
hanleysw@...1st Jul 2008 -
Yes, failures are high
Yes, Failures are high,
It was a good time when the IT industry boomed in India in 80's.
First they got all excellent brainy people who were good in developing software
Then came an era that these brainy people went to the US to fetch higher position and salary and never came back
The software companies started to feel a gap and recruited medium intelligent people, thus reducing the quality to mediocre
Then even these people reached high to become managers or started to migrate to US or other countries or do higher studies.
Then even more gap fell and they recruited least intelligent people, thus leading to a total failure of quality
More over all companies will promise to do a software in 1/2nd or 1/3rd the time that takes by any other company, communicate to the team who does the software to do it in 1/2nd of the 1/2nd time and each developer will be squeezed to do work in even less time by putting more than 14 hrs in development which will yield poor quality code.
This is the fate of IT industry in India now, currently the Indian government is being pressured by some religions and cast people to implement reservation for backward classes in IT industry, if this is implemented then you will get softwares developed by morons who will point out to a window in the wall if asked about Microsoft windows.
People who want to outsource please look at these problems first, being a person from India and being in IT industry for past 12 years, i felt this extreme problem while i was asked to select a software solution from few indian companies for my organisation in US, finally i ended up choosing a good quality product from a NJ based vendor.
venkat2002@...2nd Jul 2008 -
RE: Offshoring: India still No. 1
No way many u cant use any of them for DOD projects or any of government projects
, Infact its better to develop in house in US or to hire people cheap from India and INSTRUCT them exactly what they need to do and they will do it. If quality fails in such case you know how to deal with them
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Cheers,
Venkat
venkat2002@...2nd Jul 2008 -
Every coin has two sides
Like Venkat has pointed out, there are some companies in India that tries to get work done without spending sufficient time on it. In the end, the programmers who work 12-14 hours a day end up doing work that is not up to the mark.
But, there are other companies in India that does not fit the typical 'cheap' software producer image. You can find that they do a very, very excellent job.
India has a very high number of companies that have implemented high standards like CMM-I.
Of course, if you go to the cheapest vendor, you are likely to get software that is not documented, reviewed, or tested. My personal experience is that there are a lot of talented IT professionals in India. And, I have worked on US based as well as Europe-based projects/products. There have never been a case when the work quality was below par. In fact, it was the other way round.
Jim
jim4u3rd Jul 2008 -
the problem..
The problem is if you want to go cheap, then India is a alternative but when you want quality (hence no-cheap), then the first option is to use local workforce. So, usually there are not a clear image of quality service from india.
also, almost any certification and standard are used to fool about quality.
magallanes3rd Jul 2008 -
RE: Offshoring: India still No. 1
offshoring is concentrating on the quality assurance aspects also
qaboysatya@...14th Jul 2008
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