Asian countries have been known as an outsourcing region, especially having the Philippines as this is the leading destination for outsourcing services, mainly contact center outsourcing. This could be considered as old news because this has been reported so many times before. However, Asia is attracting a different kind of customers for their outsourcing services today. This is because Asia is now being recognized as an Information Technology outsourcing destination.
Both in 2011 and 2012, it was predicted that the emerging outsourcing destinations for software and information technology would be Brazil and Eastern Europe, but during the month of February and at the start of March, there has been news that Asia is actually getting attention as a destination for information technology outsourcing. Brazil and Eastern Europe may have attracted certain companies in the past year but it was Asia who is being given the spotlight today - probably because it came as a surprise.
The Sauce, a newsletter website that provides news on the business process outsourcing industry in Australia, has reported on their website that the Ministry of Industry and Information Technology of the People's Republic of China published new figures on its information technology business. The new figures suggest that the IT services and software outsourcing industry in China has grown 39.5 per cent, while the export of software in the region has grown 18.5 per cent. The increase in performance of the country in the said sector of the outsourcing industry could be attributed to the increase in demand by businesses based overseas. Moving deeper into the article, it was suggested that it is possible that the information technology sector could not be as bright as this in the remainder of 2012. What the Chinese IT outsourcing industry could implement are more innovative solutions that will separate them from the other destinations.
Serco (LON:SRP), an outsourcing solutions provider based in the United Kingdom, attributes its success to both the Asian and Australasian markets. The figures released by the said company last February showed that its pretax profits rose 11.4 per cent. The company's Chief Executive, Christopher Hyman, said that "If it wasn't for growth in the East it would have been a different set of numbers." The revenues from their centers in Africa, Middle East, Asia and Australasia have been indeed a huge factor to their success.
Singapore, which is one of the tiger economies, has been heralded as the next Silicon Valley because it is a developing hub for start-up companies and the like. With this opportunity, it is now likely for neighboring Asian countries to generate more clients for outsourcing services, including information technology and software outsourcing, both of which are quite popular with start-up business ventures.
The idea of Asian countries, aside from the Philippines, becoming outsourcing destinations are not entirely far-fetched as there have been news before that other Asian countries have been sought after to provide other outsourcing solutions. Aside from the lower labor costs that Asian countries offer, there is also the expertise and abundance of talent pool available in these countries.
Author: Jamee C.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.