New Delhi, October 6, 2008: 
The Top 8 Global Outsourcing Cities includes as many as six Indian cities led by Bangalore, Chennai, Delhi National Capital Region, Hyderabad, Mumbai and Pune. Dublin (Ireland) and Makati City (The Philippines) are the other two cities in the list. This has been revealed by a study by CyberMedia’s Global Services, the media platform for global IT outsourcing and BPO industry, and Tholons, a global investment advisory firm. 

India’s representation in the top 50 Emerging Global Outsourcing cities has grown to four, from last year’ three, with the addition of Jaipur to the list at No 31. The other three cities in the list include Kolkata at No 6, Chandigarh at No 12 and Coimbatore at No 17.

ebu City (The Philippines), Shanghai (China) and Beijing (China) lead the list of emerging global outsourcing cities. 

The ‘Top 50 Emerging Global Outsourcing Cities’ 2008 list has nine entrants - Quezon City, Toronto, Rio de Janeiro, Mexico City, Jaipur, Singapore City, Chengdu, Guadalajara and Mandaluyong City. 

Six Chinese cities are a part of the top 50 emerging cities for global outsourcing list, compared to India’s four. These are Shanghai, Beijing, Shenzhen, Dalian, Guangzhou and Chengdu 

However, six cities from 2007 have not made it to the list this year - Perth (Australia), Baguio City (The Philippines), Leeds (U.K.), Birmingham, (U.S.), Oklahoma City, (U.S.), Juarez (Mexico).

Of the top 50 cities, 19 are from Asia and 13 from Central and Eastern Europe. Besides tier-1 Asian cities, outsourcing centers are being set up in many tier-2 and tier-3 cities. 

As per CyberMedia publication Global Services, the top entries from Asia are Cebu City, Shanghai, Beijing, Ho Chi Minh City, Kolkata and Shenzhen. The top ranking entries from Central and Eastern Europe include Krakow (Poland), Prague (Czech Republic), and Budapest (Hungary). 

Top 50 Emerging Destinations for Global Outsourcing 

Chinese Cities Dominate
While Chinese cities like Shanghai have established themselves as mature destinations for offerings such as F&A, product development, R&D and testing the government is focusing on use of English language in schools.

With a supportive government and favorable outsourcing conditions, China’s outsourcing industry is set to flourish further. Some new Chinese cities might make an entry into the list next year or some of the top emerging cities might move to the top outsourcing cities’ list, says the study.

Cities like Guangzhou are known for engineering-services, whileapplication development and maintenance and business analytics are now being offered from Shenzhen and Shanghai respectively. 

Consequently, the country is home to numerous IT and BPO services providers. While global providers such as Accenture, ACS, Atos Origin, AT&T, Capgemini, Cognizant, Convergys, EDS, Genpact, HP, Infosys, IBM, Satyam, TCS, Wipro and Unisys have their presence across the China, local providers such as Augmentum, Bleum, Dextrys and Neusoft are also known globally. 

The study has also shortlisted tier-II cities around the world which have the potential of moving into the top 50 list. These include Nizhniy Novgorod (Russia) Cork, Republic of Ireland, Tianjin (China), Bacolod City (The Philippines) and Amman (Jordan). 

Specialization vs. Low Cost
To set up an outsourcing center the choice of the right city has become more important than the choice of the country, the study says. Attributes of a city like available resources (quality and type of work force, cost, available infrastructure), and its long-term potential in fulfilling demand for specific services determine its attractiveness as an outsourcing centre. 

CyberMedia’s Global Services from the USA, the first Indian magazine title to be published from outside the country for a global audience, report says increasing competition in the global outsourcing will make the cities more focused in identifying appropriate service lines and in developing their service-delivery capabilities. 

Commenting on the 2nd Global Services study Ed Nair, Editor, Global Services said, “The concept of an individual location being a ‘one-stop-shop’ has given way to ‘smart, multi, selective sourcing’ models, wherein selected processes are outsourced only to the most appropriate destination.” 

While Bangalore, Krakow, Makati City and Shanghai are the established centers for finance and accounting, Cebu City, Colombo and Pune are the emerging centers of excellence for this function.

Similarly Shanghai, Dublin and Bangalore are currently the leading centers for research and development and Beijng, Chennai and Prague have been identified as the new emerging centers for R&D services in 2008.

Interestingly, there is a trade-off between cost benefit and complexity of services offered by a city. In many cases, an offshore location with lower costs, also processes less complex services and vice-versa. For instance, offshore cities such as St. Petersburg, Shanghai, Bangalore, Makati City, Ho Chi Minh City and Delhi (National Capital Region) provide high-end, complex functions but not necessarily at a lower cost. 

Similarly, it is possible to get less complex work done at onshore locations such as San Antonio and Glasgow at lower price. 

Avinash Vashistha, CEO, Tholons, said "Clients’ focus on identifying outsourcing locations has driven the emergence of ‘Centers of Excellence.’ Rise of Manila National Capital Region (NCR) – an agglomeration of 16 adjacent cities - is an example. Though less than 1/13th of India’s population, its BPO revenues are already half as large as India’s BPO revenues.”

“Cairo, is uniquely positioned to cater to not just the traditional UK and US markets, but also to the fast growing Middle Eastern market,” adds Vashistha.

The study has also shortlisted tier-II cities around the world, which have the potential of moving into the top 50 list. These include Nizhniy Novgorod (Russia) Cork, Republic of Ireland, Tianjin (China), Bacolod City (The Philippines) and Amman (Jordan). 

Beyond Emerging Cities
While the focus of the study was to identify the top 50 emerging cities, it also listed the top global outsourcing cities. 

Ed Nair, Editor, Global Services adds, “Even as new destinations emerge, old ones continue to grow. In fact, our list of top outsourcing cities has expanded from 5 in 2007 to 8 in 2008, which indicates the growing footprint of even the matured destinations.”

The Top 8 Global Outsourcing Cities includes a few new members — Chennai (India), Hyderabad (India), Makati City (The Philippines) and Pune (India). As expected, Indian cities dominate the list once again. Makati City, as part of the Philippines NCR (National Capital Region) holds its ground.

Methodology
To determine delivery and consumption trends for global outsourcing services in specific destinations, surveys and interviews with tier-1 and tier-2 providers and service buyers were conducted. The data gathering methodologies were also applied to determine market and labor sizes as well as expansion strategies of tier-1 and tier-2 providers.

In addition, governments, industry bodies and related stakeholders were also interviewed to provide both primary data and validation of analysis. We obtained historical stats from governments, global institutions and agencies, and economic-related data from monetary bodies. Publicly released data from government sources were also considered when using country-specific market data. Publicly available financial records such as quarterly and annual reports, industry bulletins and trade publications were used to verify market assumptions and analysis.

A combination of comprehensive quantitative and qualitative analysis was considered in developing the rankings using a proprietary weighting and ranking system.

About Global Services
Global Services, a media platform by CyberMedia, facilitates the global service delivery for the buyers and service providers of IT and business-process outsourcing services and provides cost-effective marketing solutions to the service providers in this industry. A multi-shore team spanning the USA and India drives the Global Services brand. The Global Services brand is an integrated media platform that includes the website globalservicesmedia.com and global seminars.

About CyberMedia
CyberMedia is South Asia’s first and largest specialty media house, with 15 publications (including Dataquest, PCQuest, Voice&Data, BioSpectrum (India & Asia), Living Digital, Global Services, DQ Channels, DQ Week, Voice&Data Connect, Dare and Halsbury’s Law Monthly) in the infotech, telecom, consumer electronics and biotech areas, and is media value chain including the Internet (www.ciol.com), events and television. The group’s media services include market research (IDC India), content management, multimedia and media education. 

CyberMedia’ BioSpectrum Asia from Singapore and Global Services from the USA are the first Indian magazine titles to be published from outside the country for a global audience. CyberMedia has recently tied up with MIT to launch conference and publication for Emerging Technologies in India.

About Tholons
Tholons is a Services Globalization and Investment Advisory firm that combines "Best of Breed" consulting experience with deep execution expertise and investment insights to deliver truly effective services to its clients. Tholons offers a detailed understanding of business processes and combines it with practical hands-on expertise in executing the strategy. Tholons draws upon the considerable experience of a hand-picked team, which has successfully formulated and executed globalization strategies to unlock value for Global Fortune 1000 companies. Service providers leverage Tholons expertise to optimize their global delivery model. Tholons advisors engage with government bodies to build compelling strategies for making countries attractive destination for outsourcing.

For media queries, please contact:
At Strategic Communications and PR
Sanjiv Kataria
+ 91 98100 48095
‘sanjiv dot kataria at gmail dot com’

At Global Services
Ed Nair
Editor, Global Services
1-678-665-6005
Time Zone: US Eastern
‘ed at cybermedia dot co dot in’