Everest: China Emerges as Mature Location for Outsourced Services Delivery, but Lacks Some Capabilities for North American Bu...
August 11 2010 - 11:20AM
Business Wire
China has joined India and the Philippines as a mature location
for offshore delivery of outsourced services, but the country is
only best suited for regional work and lacks some capabilities that
global companies seek for supporting North America and Europe,
according to Everest, a global consulting and research firm.
Everest presents findings and insights about the Chinese
outsourcing market in a new research report, What is the True
Maturity of China’s Offshore Services Market? Additionally, a
one-hour Webinar will be held August 17, 9 a.m. CDT, to present
study findings and insights.
The report concludes:
- China is a mature offshore
services destination, but a role only for regional support as more
than three-fourths of China’s offshore services exports are focused
on Japan, Korea and Southeast Asia
- China lacks some capabilities to
play a meaningful role in support of North America and Europe;
therefore, most global companies leveraging China drive regional
and local support for their businesses in Asia
- China’s primary limitation is a
lack of experienced project managers who have the requisite skills
to interact with clients in North America and Europe. Challenges
further limiting the scale of offshore services for these
geographies are lack of adequate English skills and insufficient
cultural affinity
- Concerns around data privacy and
intellectual property protection persist and constrain the types of
services and platforms that buyers are comfortable supporting from
China
- Service providers are building
scale, but the pace of growth for pure offshore services is small.
Many service providers leverage their centers in China in a role to
support specific modules (e.g., testing) for other delivery centers
in India and other geographies
Everest’s designation of China as a mature offshore delivery
location follows a cumulative series of comprehensive research
findings:
- China’s emergence as a mature
location was reported in Everest’s Market Vista Location Heatmap in
the firm’s quarterly market report, Market Vista: Q2 2010, released
in early August. Using the number of established Forbes 2000
captives and Top 50 service provider delivery centers as a metric,
the Heatmap monitors the maturity of different locations and is a
standard component of the firm’s Market Vista reports.
- In Everest’s market survey of
buyer organizations earlier this year, reported in Offshore
Locations: Buyers' Perceptions and Plans for 2011-2012, 28 percent
of buyers cited China in their plans to expand offshoring scale
within the next two years.
- Analysis of the landscape in
China, supplemented by interviews with leading buyers and suppliers
of offshore services, yielded additional insights.
“In the last three years, China has witnessed continued interest
and activity, with service providers scaling up operations and
buyers starting to experiment with more seriousness,” said Research
Director Anand Ramesh. “In our advisory engagements, China is
frequently cited by buyers as a consideration but is primarily
playing a role as a regional center within their global sourcing
portfolios.”
The Webinar on key global sourcing market developments in
Q2-2010 will be held August 17 at 9 a.m. CDT; 2 p.m. GMT Standard
Time. The Webinar also will feature a special section about
additional insights on offshore services market in China. To
register, please visit:
www.everestresearchinstitute.com/Events/Webinars.
Everest’s quarterly Market Vista reports provide data and
analysis of deal trends in the outsourcing and offshoring market,
captive landscape, current and emerging locations, key supplier
intelligence insights, and key developments across the top 20
financial services companies globally. Market Vista also includes
location datasets, Breaking Viewpoint briefings, Market Vista
Primer and Global Locations Insights newsletter.
For information about Everest’s research services, please visit
www.everestresearchinstitute.com, e-mail
info@everestresearchinstitute.com or call +1-214-451-3110.
About Everest
Everest Group is a global consulting and research firm that
comprehensively serves the sourcing market. An industry leader
since creating the sourcing consultancy practice in 1991, Everest
has earned a worldwide reputation for ongoing innovation by helping
clients capture optimum value through sourcing strategies and
implementation. Everest provides information, insight, and advice
to help buyers, suppliers, and enablers of services effectively
navigate all stages of the sourcing lifecycle. Committed to thought
leadership, Everest is noted for its fact-based analyses and
insights on the outsourcing, offshoring and shared services
marketplace. For more information, please visit www.everestgrp.com
and www.everestresearchinstitute.com.