Ranking criteria for global outsourcing destinations

1. © 2009. Copyright Tholons Inc. All rights reserved.
Advisory Investments Research
Jonathan De Luzuriaga
Managing Director
January 2010
Version 1.0
Country Assessment Framework

2. Page 2
Looking at Fresh Options
Why are clients seeking new geographies?
Why will existing solution not be enough in the new decade?
Closer to Customer
New Generation of Services
Specialized Skill Requirement
Established Locations inhibited by Talent Saturation
Localization
Integration of new countries into the Global Economy
(Example: Brazil, South Africa, China)
Customer Demand becoming more Sophisticated
Evolving and Developing ProcessesNew Customer Segments

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Key Question: Where should we locate?
What proportion of a city’s talent is EMPLOYABLE in the outsourcing and offshoring (O&O) industry?
What PROCESS is most suitable for the employable talent available in a city?
Which location can yield maximum COST BENEFIT and most EFFECTIVE OPERATIONS
OUTSOURCING DESTINATION
providing
Best TALENT
Best COST STRUCTURE
& MINIMUM RISK
for
SPECIFIC OUTSOURCING REQUIREMENTS
Employability
Complexity
Handling
Capability
Cost
Vs.
Effectiveness
Outsourcing
Destination
Outsourcing
Destination

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Parameters influencing selection: Process Requirements
and Geographical & Operational Delivery Models

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One destination, Various Perspectives
Buyers / Clients
LOCATION
Service Providers Government & Policy Makers
Cost Advantage
Cultural Affinity
Near Shore / Time Zone
IP Laws and Risk
Factors
Client Potential
Infrastructure
Scalability
Government Support
Foreign Investments
Export Revenues
Economic Progress
Employment Generation
Each destination is viewed differently by the various stakeholders, leading to different:
“Judgments – Perceptions – Decisions”

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Tholons Location Assessment Framework
Scale & Quality
• Labor Pool
• Skills Availability
• Graduate Output
• Complexity
Cost Business Catalyst Infrastructure Risk Profile Quality of Life
• Cost of Operations
• Cost of Training
• Cost of Real Estate
• Cost of Bandwidth
• Cost of Living
• Cost of other
Infrastructure
• Connectivity
• Bandwidth Availability
• Transportation
• Commercial Risk
• Political Risk
• Natural Risk
• Social Risk
• Social Infrastructure like
Education Institutions,
hospitals etc.
• Non Work Culture
• Availability of
Recreation/Leisure
facilities
• Government
Benefits/Incentives
• Competitive Landscape
• Untapped Labor Pool
• Currently Employed
Skills and
Scalability
Savings
Business
Environment
Operational
Environment
Risk to
Business
Non-Business
Environment
Each city has unique dynamics and capabilities to offer to the Services Globalization Industry, the
Tholons Location Assessment Framework acknowledges and helps identify that

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Top voice based contact
center destination, has
been unable to evolve
towards non-voice/IT
services
Top voice based contact
center destination, has
been unable to evolve
towards non-voice/IT
servicesThe Global Leader, but
increasing competition and
rising demand-supply gap
in talent pool
The powerhouse of the
MERCOSUR with an
attractive domestic market
Huge scale and very
competitive cost; however,
English has proved to be a
huge constraint on growth
potential
Top 5 Offshore Nations
Philippines
Most culturally aligned
and offers high
productivity, facing
stagnancy due to high
cost
India
ChinaIreland
Brazil

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Nearest destination with
perfect cultural alignment
to US; minimal cost
advantage
Nearest destination with
perfect cultural alignment
to US; minimal cost
advantage
Multilingual near-shore
targeting to US Hispanic
market, has taken a bite from
Canada’s market share
R&D center of the world
with abundant skill
availability
Lowest cost destination in
the world, however,
struggling in evolving
towards high-value ITO
services
Offers scalable and
sustainable talent pool
among its competition with
the smaller countries in EE
Next 5 Offshore Nations
Canada
Mexico
Russia
Poland Vietnam

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Emerged: With Scalability and Cost Advantage
City Country Rank 2008 Rank 2009
Bangalore India Top 8 Top 8
Delhi NCR India Top 8 Top 8
Mumbai India Top 8 Top 8
Manila NCR Philippines Top 8 Top 8
Dublin Ireland Top 8 Top 8
Chennai India Top 8 Top 8
Hyderabad India Top 8 Top 8
Pune India Top 8 Top 8
Due to the global recession, the Top 50 list has seen minimal movements. While the emerged locations
have retained their positions, emerging locations have undergone consolidation with “sustainable
advantage” being the theme for differentiation.
Indian cities’ service delivery
maturity and cost-effectiveness
bolster its position as a leading
outsourcing location.
Dublin as an early entrant in
Europe with its skills availability
and nearshore proposition
Manila, as well as the leading cities in
India, maintain their leverage by
capitalizing on the labor pool’s
language skills and scalability

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Contact
Jonathan De Luzuriaga
Managing Director
jonathan@tholons.com
Asia Offices
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Phone: +1-646-290-9320
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