India and China: Which will be the outsourcing powerhouse in the 21st century?

India and China: Which will be the outsourcing powerhouse in the 21st century?

Discussions surrounding offshore delivery locations and where they should be situated quickly boil down to debating the relative merits of India and China. The major progress on the back of capital investments, inflows, and export successes these countries have received over the past decade has placed them on the radar of any prospective offshore delivery location investor. This focus has increased in the past two years, given the two countries' apparent insulation from the economic storm that impacted the rest of the world.

This report assesses some of the key factors that have put these two countries in their current positions. It considers what is driving their apparently insatiable growth as delivery locations, discusses some of the main players active in these markets, analyzes their comparative strengths and weaknesses, and examines possible futures and areas of opportunity.

• Summary
  • Impact
  • Ovum view
  • Key messages
• Market Opportunity
  • Both are becoming more popular as the levels of investment increase
  • IBM
  • HP
  • Accenture
  • Capgemini
  • Wipro
  • TCS
  • Delivery locations are expanding
  • Which country?
  • Within country
  • Growing centers of power
  • Factors driving growth in the Chinese and Indian IT sectors
  • Geography
  • Language and education
  • Technical capabilities and skills
  • Economic factors/growth
  • Labor cost
  • Stability
  • Government incentive
  • Client demand
• Country Strategy
  • Understanding the fundamentals
  • Strategy, structure, and rivalry
  • Factor conditions
  • Demand conditions
  • Related industries
  • Governmental role
• Competitive Landscape Analysis
  • Embedding “localness”
  • US giants do not dominate local markets as they do elsewhere
  • The Indian global providers are expanding out of their traditional markets
  • Non-US multinationals are investing, but often playing catch-up
  • Locals struggle to make an impact
  • Disrupters
• Go To Market
  • Level, depth, and breadth
  • Vendors considering market entry or expansion
  • Global delivery networks
  • Access to low-cost, high-quality resources
  • Nearshore
• Challenges Remain
  • Access to affordable skills and talent management
  • Cultural conflicts
  • Intra-country locations
  • Security and stability
  • Urbanization and core infrastructure
• Recommendations
  • Recommendations for enterprises
  • Ask the question
  • Consider what you are comfortable with having delivered from these locations
  • Shop around
  • Recommendations for suppliers
  • Define the main reasons for entering
  • One size does not fit all
  • India or China? It's more likely to be India and China
• Appendix
  • Methodology
• List of Tables
  • Table 1: Chinese and Indian urbanization (population in urban centers and percentage of total population)
  • Table 2: Investment for growth in India and China
  • Table 3: India and China in-country tiering
  • Table 4: India and China country comparison, Porter's Diamond of National Advantage factors
• List of Figures
  • Figure 1: GDP growth rates by country, 1Q10
  • Figure 2: Exchange rates (percentage against the US dollar)