Eric Simonson, managing partner of Everest Group Research, argues that the search for the “next India” should be redirected. Rather, outsourcing customers will benefit more from a portfolio-like approach, matching their own needs to unique strengths offered by different regions. For now, India remains a low-cost, low-risk option for clients, but companies can achieve real business value when they recognize and capitalize on different regional strengths, perhaps looking to Latin America for real-time communication with vendors, cultural compatibility, or Spanish Language skills.
Simonson’s belief that we won’t find a “next India” is based on India’s unique advantages like the sheer size of its workforce, maturity of its outsourcing industry, and low labor costs. India has the second largest labor force in the world with 478,300,000 people. That’s about twice as many laborers as offered by all of the Latin American outsourcing players combined, totaling 244,005,000 people (figures provided by UN 2011 HDR). The paradigm switch from finding the next India to finding a customized portfolio of destinations will allow companies to meet their specific needs and lower risk with an alternate skill source in case, for example, Indian labor rates suddenly soar.
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