For the last ten to twenty years, outsourcing to India has long dominated the outsourcing landscape.

But that appears to be changing with recent emerging players raising their heads to take advantage of the outsourcing game.

Although there are some good options for outsourcing to Latin America, Eastern Europe and Russia, Mexico and other Asian counterparts like Vietnam and the Philippines, China is touted take the lead in the next few years as the leading outsourcing country.

Despite worries that the Philippines might become the biggest business process outsourcer in a decade or so, China is closing in on the gap within the industry.

The clear advantage that China brings to the table is the six billion people or more that populate the mainland.

With more and more engineers graduating from Chinese universities, there is scope for more work to come their way.

One criticism that points to China is that despite the fact that the country boasts its Internet skills among its population, the English speaking capacity is significantly lower than those of workers found in countries where Internet skills are far less.

This discrepancy will cost China but only to a certain extent because everything is so cheap in China.

Talking about cheap, companies will want to consult several vendors before deciding to hire one in China.

Cheaper does not necessarily mean better. Just as the euphemism, ‘You get what you paid for,’ is an apt description of quality all around the world, the same is true in China.

There will be several points where point of contacts of outsourcing firms will have to define and spell out clearly what kind of product or service is desirable for the company.

China has traditionally been good at process development when it comes to manufacturing and that tradition continues to grow. We buy everything from TV sets to cell phones from China.

They have a way of bringing the basics to life and for a price that is fraction of its rivals – patent infringement aside, of course.

Just a few years ago, there were controversies over Chinese products coming into the U.S. that was tainted, for example seafood that salmonella in it. Another big scare was lead found in paint in children’s toys manufactured in China by Mattel. .

And there was a domestic scare about the ubiquitous ‘Chinese pork bun’ being made out of inedible materials.

All this goes to show that if you’re going to outsource to China, you will have to engage in frequent monitoring of products and also engage in constant communication with vendors so that standards are misinterpreted.

If that can be achieved, China outsourcing offers value for the money.

Source:http://www.sourcingfocus.com/index.php/site/newsitem/2963/

With low costs, advanced IT technology as well as complete infrastructure, China has become the most competitive country in global service outsourcing.

The announcement came on Oct. 14 as Beijing released its 2010 report on China’s IT service development.

The report, which was compiled by the Ministry of Industry and Information Technology, said the IT service in China witnessed 30 percent annual growth over the past three years, three times more than national GDP growth over the same period. It is estimated that the growth rate is expected to hit 25 percent in three years, and the industrial scale will reach 820 billion yuan by 2012.

According to the report, the information service industry is shifting to developing countries, with Russia becoming the development and research centre of global emerging service outsourcing, the Philippines aspiring to the status of the largest call center outsourcing destination in the Asia-Pacific region and Vietnam hoping to be the world’s largest IT provider.

The report said China enjoys the advantages of being a software outsourcing giant thanks to low labor costs, a large number of employees in software development, language advantages in terms of Japanese and English as well as government support. Furthermore, European and American markets have become less and less dependent on Indian outsourcing providers.

The report also pointed out that China still takes up a small portion of the global total. Despite rapid development, the outsourcing industry in 2009 only accounted for 4 percent of the global total, which is in sharp contrast to China’s status as a global leading industrial country.

India, which is similar to China in many aspects, yields more than 34 percent of global offshore outsourcing services, 10 times more than China does.

Source:http://english.peopledaily.com.cn/90001/90776/90883/7167613.html

Although some U.S. firms are bringing overseas work back home, evidence is growing that companies are moving more jobs than ever to China and other countries – a trend that could hinder efforts to bring down the nation’s stubbornly high unemployment rate.

One sign of the growing movement of jobs overseas is the rising number of applications for federal Trade Adjustment Assistance, which usually goes to factory workers who lost their jobs because their work was sent overseas or was undercut by cheaper imports.

For the six months that ended Sept. 30, workers at about 1,200 offices and plants nationwide were approved for Trade Adjustment Assistance.

That’s about 20 percent more approvals than in the same six-month period last year, according to the Labor Department.

In addition, the most recent Commerce Department data show that employment at the foreign subsidiaries and affiliates of U.S. multinational firms grew by 729,000, to 11.9 million, between 2006 and 2008.

Over that period, domestic employment by such firms slipped by 500,000 jobs, to 21.1 million.

“The paradigm has shifted,” said John Challenger, chief executive of the Chicago outplacement and consulting firm Challenger, Gray & Christmas. “Most companies see the next phase or era of growth as global. . . . That’ll still create jobs here, just not on the scale when they were focusing on growth in the U.S.”

That trend could further stall the economic recovery, which many economists believe will continue to lack vigor while unemployment remains high – currently 9.6 percent nationally.

Among the companies that have recently sent jobs overseas are Hewlett-Packard Co. in Palo Alto, Calif., and Hilton Worldwide, the McLean, Va., hotelier that had maintained a reservations center in Hemet, Calif., employing 295 people. Hilton indicated it was moving the center to the Philippines to save money.

“Across all aspects of its business, Hilton Worldwide is committed to maximizing operating efficiencies while maintaining service levels,” Hilton said in a statement.

Also moving to the Philippines this year were JPMorgan Chase’s telephone-banking operations, from Troy, Mich.

Hewlett-Packard is laying off an undisclosed number of human-resources employees in 10 states, transferring their functions to Panama.

Hilton and Hewlett-Packard would not provide details of the job moves, which were disclosed in recent government filings.

The movement abroad of U.S. production and jobs has been going on for more than two decades, with service firms more recently pushing the trend.

Experts say more such movement could help U.S. firms better compete in the global economy, thus boosting sales and profits that will sustain them and generate more business.

Eventually, stronger, expanding firms could create more opportunities for U.S. workers, though that’s not a sure thing. More and more, for example, upscale engineering and development for products manufactured in China are being done in China, near the centers of production – not in the United States.

Dennis Donovan, a corporate-relocation consultant, said many legal and engineering firms already had outsourced routine work overseas, and he sees a bigger wave of such action by the burgeoning health-care industry. At the same time, he sees fewer companies moving overseas strictly on the basis of cost.

“Now it’s R&D centers and also for market penetration,” said Donovan, a principal at Wadley-Donovan-Gutshaw Consulting in Bridgewater, N.J.

He said some U.S. firms were beginning to move call centers and other back-office operations back to the United States because costs in China, India, and other leading outsourcing countries had risen sharply and quality had not been consistent.

Source:http://www.philly.com/inquirer/business/20101016_Outsourcing_wave_grows.html