Managing Offshore and neoIT, an offshoring advisory firm, team up to identify the 100 top providers of globally- delivered ITO, BPO, and call-center services. This report features topline results of an exclusive study of these providers, plus short lists of market leaders in 10 offshore service segments.

While the U.S. economic downturn spurred many corporations to tap offshore business and technology talent, many of these firms are quietly building captive global operations or centers of excellence augmented by outsourcers that will enable them to vie for slices of emerging global markets. What does this mean for global-sourcing managers? In 2005, watch for managers with global-sourcing and program management office (PMO) experience to be coveted for hot skills that command higher pay.

Tracking the global global service providers is a business discipline that requires more knowledge than you can stuff into a 200-page service servicelevel agreement. Unfortunately, offshoring success breeds more complexity. Back in the Dot-Com com era, a C-level executive merely needed to know a few leading trusted suppliers; today a global-savvy PMO team needs to know dozens of sourcing options. That, in a nutshell, is the spirit behind the first Offshore 100, a joint research project by Managing Offshore and neoIT, a San Francisco Bay Area outsourcing advisory firm. You may be surprised to learn that there are 100 viable offshore service providers, but we have found that worldwide there are more than 500 outsourcers ready to vie for your service dollars.

Knowing that some outsourcers may belong in incubators rather than in the waiting room outside your office, we designed an in-depth questionnaire to facilitate the initial round of screening. Once we identified the firms that compose the Offshore 100, we short-listed the leaders in 10 service-delivery categories-firms you may want to invite to respond to your upcoming RFPs. (The lists follow this article.)

The envelopes, please:

The Tech Awards

• Top 10 Best Performing IT Services Firms: Affiliated Computer Services
• Top 10 Specialty Application Application-Development Leaders: i-flex solutions
• Top 10 Specialty Offshore Infrastructure Service Providers: HCL Technologies

• Top 10 Best Performing BPO Providers: WNS Global Services Pvt
• Top 10 Leaders in Human Capital Development: WNS Global Services Pvt
• Top 10 Offshore Call Call-Center Firms: Wipro Limited

• Top 5 to Watch South of the Border: North American Software
• Top 10 to Watch in China: Bleum, Inc.
• Top 5 to Watch in Central & Eastern Europe: EPAM Systems Inc.
• Top 5 Rookies: GE Capital International Services

What makes these firms more special than the ones that ranked No. 2-to10 or even out-of-the-money (figuratively speaking) in our respective categories? In all cases, these companies rose to the top by demonstrating a pattern of market leadership, innovation, and outstanding governance. In some instances the leaders’ service offerings were well differentiated, but mostly considered a combination of factors, including size, profitability, a multishore presence, demonstrated capabilities, and staff training or certifications. There’s no simple formula for success, but firms that emphasize quality and expertise rather than affordability tended to perform the best in the Offshore 100.

	Sourcing During the course of the first annual Offshore 100 study, neoITand Managing Offshorecollected over more than 250 data points from a wide range of service providers that included large multi-national firms, emerging BPO providers, and small domestic IT-services firms. The data points were clustered in four categories that included general company information, client data, operational capabilities, and human-resource policies. Respondents to the survey included firms from 13 countries around the world, representing many of the most popular offshoring destinations, such as India, The Philippines, China, Russia, Malaysia, and Mexico. Rather than rank each company from 1-to-100, we opted to give you a head start in your quest to maintain updated “short lists” of the leading providers of globally-delivered services, ranging from BPO to ITO to regions and rookies to watch. As with any “opt-in” study, companies that took the time to thoroughly complete entry forms and essays tended to score a bit higher than those that did not.

In some cases the margin of difference between a company that placed first, second, or tenth was extremely small. Of course, that’s the nature of short-listing- particularly with mature service areas such as ITO. Some of the provider’s offerings have become commoditized to the point where a customer basically selects the final vendor based upon price and service reputation. The qualities of paramount importance to your team may differ from that of your vertical-industry peers, or to a firm that has more (or less) global experience. Here are some of the qualities we looked for or found along the way:

• Flexibility. The leaders tend to offer creative and flexible engagement models that they employ with their global clients. In some cases, customers have benefited from equity participation, creative financing, or hybrid pricing models. In most cases, the leaders clearly demonstrated their understanding of the client’s need to convert fixed costs into variable costs through the offshoring relationship.
• IT Power. While data hosting isn’t yet a core strength of offshorebased firms-U.S. providers such as ACS, IBM, and EDShave the edge there-the IT leaders are innovating in other ways, offering proprietary enabling technologies for global development; increasingly deep domain knowledge and extensive vertical-industry experience. Many offshore leaders are scaling up from application development and maintenance to tackle monitoring, integration, and even regulatory-compliance issues.