After declining for about three years, India’s popularity as an outsourcing hotspot for tech companies has increased sharply.
That’s according to BDO USA, an accounting/consulting organization, in a poll of 100 U.S. technology CFOs.
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| Current outsourcing destinations | 2012 | 2011 | 2010 | 2009 | 2008 |
| Canada | 11% | 9% | 11% | 4% | 17% |
| China | 39% | 35% | 44% | 19% | 46% |
| Eastern Europe | 14% | 9% | 17% | 12% | 19% |
| India | 62% | 29% | 36% | 50% | 60% |
| Latin America | 6% | 9% | 22% | 8% | 19% |
| Southeast Asia | 23% | 24% | 36% | 31% | 50% |
| U.S. | 5% | 6% | 11% | 8% | N/A |
| Western Europe | 29% | 24% | 22% | 19% | 21% |
BDO also found that:
- Overseas tech outsourcing in general is way down. Thirty-two percent of respondents say they currently outsource services or manufacturing outside of the U.S., compared to 62 percent in 2009.
- IT, not manufacturing, is more often the outsourced task of choice. Manufacturing “went from being the most commonly outsourced function in 2011 (53 percent), 2010 (51 percent), and 2009 (54 percent), to the least cited outsourced function in 2012 (33 percent),” BDO says. This may be tied to the natural disasters in Thailand and Japan in 2011.
- Latin American and Western Europe outsourcing could grow. Of the 32 percent of CFOs currently outsourcing, Latin America is the one country or region most being considered for future outsourcing. A year ago, nine percent saw Latin America as a top future destination, and now 23% do. It’s a similar, even more dramatic story, with Western Europe: 3% projected it as a top future spot a year ago, and 20% do now.
I just returned from a trip to India and found the people to be super friendly and India to be very safe. Side note, about 4M visit india each year (vs 150M for China)… While there, I met with various companies including Infosys a large outsourcing provider. The activity on “campus” seems to be very robust, so it does seem like business is picking up there.
BTW – Infosys buys land in the middle of no where and builds campus’ (that grow into towns/cities). Here’s some pictures of the buildings on some their campus: http://bit.ly/xXAOS4
Yeah, India seems better than China. By the way, I heard Filipinos in South Asia are also ideal for outsourcing. Just sharing, guys.