Offshore IT services spending will grow 40 percent in the United States and 60 percent in Europe in 2008, according to research analyst firm Gartner. Where should those outsourcing dollars go?
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Gartner used ten criteria (language, government support, labor pool, infrastructure, educational system, cost, political and economic environment, cultural compatibility, global and legal maturity, and data and intellectual property security and privacy) to compile a list of the top 30 global destinations for IT services by region:
Destinations in the Americas are most attractive to buyers in the United States. Canada led in seven of Gartner ten list categories (faring worst in the region for cost of labor). Latin American countries are increasingly valued for their Spanish speaking employees, but IP and security concerns are more prevalent.
In the Asia/Pacific region, China, India and Singapore all demonstrated strong government support of IT services, but China scored poorly on language skills, according to Gartner. Political and economic risk are an issue with Pakistan, the Philippines, Sri Lanka and Vietnam, says Gartner, while higher-cost locations like Australia, New Zealand and Singapore led for cultural compatibility, global and legal maturity, and data and intellectual property security and privacy.
Government support was generally low in the EMEA region, according to Gartner. Ireland, Israel, Northern Ireland and South Africa garnered good scores for English language. But the Czech Republic, Slovakia, Hungary, Poland and Romania got extra credit for alternative language capabilities—attractive for an increasing number of continental European buyers. New EU members Slovakia and Romania, along with Russia and Ukraine were low cost leaders, though Gartner notes costs in the EMEA region are in a state of flux.