Gartner: Top 30 countries for offshoring

Determining the countries that are best placed to host offshore IT operations is a daunting task for many organisations, according to Gartner. This year, Gartner has assessed the suitability of 72 countries as offshore locations, and has announced its 'Top 30'.

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The analysis showed that the dynamic nature of the market has seen a number of countries position themselves as credible alternatives to the BRIC countries (Brazil, Russia, India and China).

"Countries such as Mexico, Poland and Vietnam have continued to strengthen their position against leading alternatives, while others have forced their way into the 'Top 30'. These countries will be seeking to take advantage of the opportunity created by the increased focus that many organisations now have on cost optimisation, as a result of the current economic crisis," said Ian Marriott, research VP at Gartner.

During the last 12 months there has been significant activity in many countries to consolidate or grow their positions as leading locations for offshore services. "As a result of this, four countries have dropped out of the 'Top 30' and have been replaced by four that were just outside the 'Top 30' 12 months ago. This does not mean that the four 'relegated' countries have underperformed this year but the dynamic nature of the market has seen others making strong progress," said Mr Marriott.

The four countries leaving the 'Top 30' this year were Northern Ireland, Sri Lanka, Turkey and Uruguay. The new entrants into the 30 leading countries for offshore services were Egypt, Morocco, Panama and Thailand. Strong interest in nearshore locations was a key factor; language skills, cultural compatibility, time zone and travel time were important considerations.

As French speaking countries increase their proportion of work conducted offshore, they have been keen to find appropriate French language countries, and saw Morocco 'step up'. The nearshore benefits of Egypt and Panama, and the cost consideration in Thailand were also important.

In 2008, Gartner's top 30 locations for offshore services, by region, were:
-- Americas: Argentina, Brazil, Canada, Chile, Costa Rica, Mexico and Panama
-- Asia/Pacific: Australia, China, India, Malaysia, New Zealand, Pakistan, the Philippines, Singapore, Thailand and Vietnam
-- Europe, the Middle East and Africa (EMEA): the Czech Republic, Egypt, Hungary, Ireland, Israel, Morocco, Poland, Romania, Russia, Slovakia, South Africa, Spain and Ukraine

Although only seven countries from the Americas appeared in the final list of 30, these countries are becoming an attractive proposition for the largest buying market for offshore services -- the US.

Only Canada was rated "excellent" for language (with fluent English and French) but Latin American countries are able to leverage their Spanish-language skills increasingly in the US as more organisations now require Spanish language from their providers for communication with parts of their workforce that speak Spanish as a first language.

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