IT Outsourcing destinations:
Here’s our list list of top IT outsourcing regions and countries in 2020 and 2021.
1. Southeast Asia
In 2014, Tholons listed the Asia Pacific (APAC) region as the most densely populated by outsourcing service providers. According to this report, “the region’s balanced proposition, such things as – cost, scalability, quality, and business environment – allowed the APAC to not only maintain its position in the global supplier market but has likewise opened new, market opportunities for service providers”.
The regions host three of the most prominent IT outsourcing destinations of the world India (which has 6 cities in the top 100 of outsourcing destinations), The Philippines (number 8 destination in the world), and China, the runner up with 4 cities in top 15.
In order to reduce their costs and delegate low-value tasks to offshore business partners. Despite the popularity of India, many other countries and regions are attracting the attention of international companies, wanting to outsource IT work. The advisory company Tholons annually publishes detailed reports, which provide quantitative and qualitative data about all the key outsourcing destinations throughout the world.
Southeast Asia remains the top destination for outsourcing though many other destinations have emerged in Eastern Europe and South America.
These regions, Asia, Eastern Europe and South America are the best in outsourcing. The reason is because they have invested and done well and improved in the fields of
- IT education
- Human capital
- Maintenance of high standards of work
Eastern Europe, including Bulgaria and Ukraine have emerged as some of the best hubs for outsourcing while Poland and Dublin in Europe are also doing extremly well in recent years.
Out of the 100 Top IT outsourcing destinations, almost 1/5th of the cities are located in Europe- a great step forward compared to a decade ago when the market was filled with Asian companies.
Eastern Europe in particular did more than well, with “the new technological hub called” Krakow(Poland) climbing to number 9 and overshadowing even top outsourcing destinations like Dublin (Ireland), headquarters to the outsourcing company Accenture.
Another Polish city, Wroclaw peaked 10 positions ahead, from 75th to 65th place.
Thanks to improved education, expert skills and exceptionally good IT and Internet infrastructure, a close location to Europe, Sofia (Bulgaria) gained momentum since 2016 and moved from position top 50 and moved to 33rd place.
In terms of origin, most of the European cities on Tholon’s list were situated in Russia, home of many large outsourcing service providers like Luxoft and Miratech.
Based on labour costs alone, Bulgaria is ranked 12th in the study, behind Poland (10th) and ahead of Romania, (13th), Russia (17th) and Latvia (18th).
Another study, Tholons 2016 Top 100 Outsourcing Destinations, has ranked Bulgarian capital Sofia among the cities in Eastern Europe which are considered attractive for outsourcing software, according to ZDNet.
3. Central and South America
With 23 cities in the chart, Central and South America establishes itself as the second most important region in the world when it comes to outsourcing. This is further supported by 2013 KPMG study which states that in the period 2012-2019 there will be a compound annual growth rate (CAGR) for the BPO service market in Latin America at around 7.4% (compared to 5.3% in North America and the highest growth in the Asia Pacific (excluding Japan) at 8.1%. Out of all the listed countries, Costa Rica performs best, reaching rank 13 out of the world’s top 100, followed by traditionally popular outsourcing destinations like Brazil and Chile in Top 30. Costa Rica’s growth (largely due to ITO), along with the emerging new locations in the region (Peru, Colombia, Uruguay, and Guatemala) has been additionally boosted by aggressive marketing and promotion strategies, led by their respective country export promotion agencies.