| Offshore outsourcing is the practice of hiring an | | | | competitor in software outsourcing. It is predicted |
| external organization to perform some business | | | | that China will emerge as one of the top three |
| functions in a country other than the one where the | | | | countries for overseas software outsourcing |
| product or service will be sold or consumed. | | | | between 2007 and 2010. Companies are already |
| Outsourcing has increased at a rapid pace due to the | | | | beginning to plan their offshore outsourcing strategies |
| advancement in modern satellite and Internet | | | | to take advantage of China's emerging strength as |
| technologies, better connectivity and a constant | | | | an outsourcing center. This includes looking for ways |
| search for less expensive labor to cut costs and | | | | to take advantage of the country's current software |
| achieve competitive advantage. By outsourcing their | | | | strengths. Some estimates state that China |
| back office business processes to less expensive | | | | outsourcing could rival India as the leading offshore |
| nations like China, India, Philippines, Malaysia, | | | | IT services market as early as 2007. |
| companies can cut labor costs, concentrate on their | | | | The recent flurry of activity that helped put China on |
| core businesses and strengths, and ensure better | | | | the outsourcing map came about partly as a result of |
| customer satisfaction. According to a recent report, | | | | government support and promotion, partly because |
| US firms have saved nearly US$8 billion through | | | | of Japan's push to move much of its software |
| outsourcing to developing nations like the Philippines | | | | development work to China, and partly because a |
| There are many developing nations that act as | | | | number of large foreign companies -- GE, Microsoft, |
| offshore outsourcing destinations to developed | | | | Dell, SAP and HP, for example -- started up R&D |
| nations. Some of the countries that can be | | | | centers in China. |
| considered as offshore outsourcing destinations are | | | | India |
| as follows: | | | | One of the major players in the offshore outsourcing |
| Philippines | | | | industry, India has a well educated, talented, low cost |
| The Philippines' key competitive advantage is its | | | | and English speaking workforce, excellent IT and |
| people. Philippines has a well-educated English speaking | | | | networking infrastructure, a fairly stable political |
| work force and stands out as the world's third | | | | scenario, friendly laws and well laid taxes and quality |
| largest English speaking nation. The attitude, | | | | certified software firms. The offshore outsourcing |
| commitment, community, and education constitute | | | | market in India is ever growing and has produced |
| the key competitive advantage especially in the front | | | | many success stories making India a popular offshore |
| office operations such as customer service and sales. | | | | outsourcing destination for IT related and other BPO |
| The Philippines boasts of a huge pool of productive, | | | | services. |
| trainable and multi-skilled labor force. Filipino | | | | Offshore assignments have moved up the value |
| Outsourcing companies such as AOV Outsourcing | | | | chain - from data entry to large and complex turnkey |
| service only hire workers that are highly qualified for | | | | projects of 200 to 300 person years. Almost any |
| various outsourcing tasks. | | | | service can be outsourced to India, be it healthcare, |
| Government support and the IT infrastructure is a | | | | engineering or KPO. |
| given. Major companies that already operate in the | | | | Malaysia |
| Philippines include AIG, AOL, Barnes & Noble, | | | | Malaysia's well-developed infrastructure, attractive |
| Chevron, Citigroup, Dell, HP, HSBC, IBM, Intel, | | | | business environment and strong government |
| JPMorgan Chase, Motorola, Procter & Gamble, | | | | support makes it a rising alternative to India and |
| Siemens AG and Trend Micro. | | | | China. The government's positioning of Malaysia as a |
| China | | | | hub for services and technology innovation has |
| In recent years, China is rapidly emerging as one of | | | | resulted in a number of multinationals locating some |
| the world's leading suppliers of offshore software | | | | of its global or regional operations in Malaysia. Malaysia |
| outsourcing services due to its incredible development | | | | has a relatively more stable political climate backed by |
| rate. Although India is at the moments the world | | | | consistent economic growth which makes it |
| leader in software outsourcing industry, China aims to | | | | attractive for sensitive, high end applications in |
| outpace India and become the next dominant | | | | banking and finance. |