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Arunava Biswas
INDIATIMES NEWS NETWORK 
11 Dec, 2007, 1835 hrs IST

MUMBAI: Organizations that choose to move IT services to lower-cost countries are daunted by the task of determining which country or countries would best host their operations. Gartner in an analysis of 30 countries stated that India remains the undisputed leader in offshore services, but increasingly countries such as China, Russia and Brazil are providing credible alternatives. In 2008, Gartner predicts offshore spending to grow 60 per cent in Europe, and 40 per cent in the US.

In Asia/Pacific, although positioned as India's greatest challenger in terms of its potential scale, China fared poorly for language skills. China, India and Singapore all demonstrated strong government support for the promotion of their country as an offshore services location.

The political and economic environment remains a concern for many companies when moving work to offshore locations; in this area Pakistan, the Philippines, Sri Lanka and Vietnam all performed weakly. On the other hand, the higher-cost locations of Australia, New Zealand and Singapore all led the rating not only in this category, but also for cultural compatibility, global and legal maturity, and data and intellectual property security and privacy, proving that the link between lower risk and higher cost holds true.

"The aim of the study was not to rank each country, as every organisation will have a different view of which factors are the most important for their needs, but rather help sourcing managers determine which locations are right for their organisations," said Ian Marriott, research vice-president at Gartner.

Gartner used ten criteria that it determined important for organisations to consider when looking at a potential location for offshore or near shore IT or business process services. They were: language, government support, labour pool, infrastructure, educational system, cost, political and economic environment, cultural compatibility, global and legal maturity, and data and intellectual property security and privacy.

Gartner's top 30 locations for offshore services, by region, were:

Americas: Argentina, Brazil, Canada, Chile, Costa Rica, Mexico and Uruguay Asia/Pacific: Australia, China, India, Malaysia, New Zealand, Pakistan, the Philippines, Singapore, Sri Lanka and Vietnam Europe, the Middle East and Africa (EMEA): The Czech Republic, Hungary, Ireland, Israel, Northern Ireland, Poland, Romania, Russia, Slovakia, South Africa, Spain, Turkey and Ukraine

"While these 30 countries demonstrated their suitability to develop or enhance their offshore service credentials, another 35 countries were also considered," said Marriott. These countries have exhibited initial activities to establish an environment that would be considered attractive for companies considering their own investments in a lower-cost country, or have external service providers located there that are beginning to sell services beyond their domestic market. However, they failed to make it into the top 30.