PSEBulletin - June 2007 - Offshoring / Outsourcing

Pakistan aims for a Larger Share in Outsourcing Business- IDG

Pakistan, which has been affected by Islamic extremist violence and civil unrest against the current government, is trying hard to compete for a share of the offshore outsourcing business. The country's highly skilled, English speaking people provide a key advantage to other IT destinations.

The above is reported by International Data Group (IDG) which is the world largest technology media, research and event Management Company based in Boston. IDG News Service is world's biggest and most famous technology-related news agency. IDG News Service serves PC World, Computerworld, InfoWorld, Network World, CIO magazine, Washington Post, Washington Times, New York Times, CNN and another 300 technology-related magazines and 400 Web sites worldwide. IDG publications reach about 100 million business and technology readers a month.

Following are the few of the links where this article is published.

•http://www.washingtonpost.com/wp-dyn/content/article/2007/08/19/AR2007081901120.html?nav=rss_opinion/columns

• http://news.yahoo.com/s/infoworld/20070817/tc_infoworld/91101_2

• http://www.middleeast.org/mereport/archives/countries/pakistan2007817.html

• http://globalnewsblog.com/blog/?p=55357

• http://www.pcwelt.de/index.cfm?pid=845&pk=91067

• http://www.globalservicesmedia.com/Content/destinations-more200708172672.asp

• http://www.networkworld.com/news/2007/081707-troubled-pakistan-aims-for-a.html

The article has also been picked up by leading papers of Pakistan like Dawn, Daily Times etc.

Source: IDG

Pakistan ranked among top 50 IT services outsource markets

Pakistan is included for the first time in the A.T.Kearney Report as global services location index 2006.. Reflecting the growing number of countries competing to establish themselves as remote services locations, ten new countries including Pakistan have been added to this year’s list.

“Pakistan has been added to the list of evaluated countries as it does have the potential seeking outsourced IT services. In many services, it’s similar to India in terms of education and people skills,” Johan Gott, an analyst at the A.T. Kearney, remarked.

IT giants term the inclusion of Pakistan in the top 50 IT potential states, with the 30th position in the list, a hallmark in its history. The success is attributed to plentiful Government incentives offered to the IT sector, outstanding performance of several companies creating major success stories and a target-oriented approach of Pakistan Software Export Board.

“Pakistan’s IT industry is growing at a high rate. Its advantages include relatively low wages amounting to as little as half the level of salaries in India, as well as reasonable real estate costs, plentiful government incentives, business environment and readily available supply of skilled workers,” remarked Lehman Brothers Holding Inc, a New York-based company.

Similar remarks were given by Todd Furniss, the Chief Operating Officer of the Everest Research Institute, who said, “Pakistan has a reasonably stable economy and a legal system based on English law. That infrastructure should make it a logical destination for services.” Everest Research Institute is an independent arm of consulting firm Everest Group in Dallas.

With China and India still leading in the list, all South Asian markets including Indonesia, Malaysia, Philippines, Singapore, Thailand and Vietnam are now ranked among the top 20 locations. The Middle East and Africa continue to rise in visibility, with Egypt, Jordan, UAE, Tunisia, Ghana, South Africa, Israel and Turkey all maintaining or improving their positions. While ‘offshore’ or ‘near-shore’ locations in developed countries improved their absolute scores, almost all fell in the rankings, as emerging markets improved their cost mechanism, people skills and environment scores at a faster rate.

Global Services Location Index 2006
1. India
2. China
3. Malaysia
4. Thailand
5. Brazil
6. Indonesia
7. Chile
8. Philippines
9. Bulgaria
10. Mexico
11. Singapore
12. Slovakia
13. Egypt
14. Jordan
15. Estonia
16. Czech Republic
17. Latvia
18. Poland
19. Vietnam
20. United Arab Emirates
21. United States (Tier II)*
22. Uruguay
23. Argentina
24. Hungary
25. Mauritius
26. Tunisia
27. Ghana
28. Lithuania
29. Sri Lanka
30. Pakistan
31. South Africa
32. Jamaica
33. Romania
34. Costa Rica
35. Canada
36. Morocco
37. Russia
38. Israel
39. Senegal
40. Germany (Tier II)*
41. Panama
42. United Kingdom (Tier II)*
43. Spain
44. New Zealand
45. Australia
46. Portugal
47. Ukraine
48. France (Tier II)*
49. Turkey
50. Ireland

About A.T. Kearney
A.T. Kearney is a global strategic management consulting firm known for helping clients gain lasting results through a unique combination of strategic insight and collaborative working style. The firm was established in 1926 to provide management advice concerning issues on the CEO's agenda. Today, we serve the largest global clients in all major industries. A.T. Kearney's offices are located in major business centers in 32 countries.

Source: A.T.Kearney

Offshoring 2.0: What will be the next big off shoring frontier - Experts agree that it will no longer be in India

Salary inflation is largely to blame for the change in course. When the outsourcing boom took off in 2004, the salaries of software engineers were one quarter of what San Francisco-area computer engineers made, making very clear the cost savings of off shoring.

But in the years since, Indian salaries have soared- in several cases to 75 percent of U.S. levels—and some in Silicon Valley have begun to sour on sending jobs to India, wrote the Wall Street Journal on July 3.
However, it wasn't only salary inflation that has caused many technology firms to pull their labor out of offshore centers; it was the hidden costs they hadn't anticipated such as geographic and time gaps, the need for more U.S. managers to oversee the outsourced relationships and the significant costs associated with pulling out.

Source: eweek