For organizations, a lot of sweat goes into choosing a location that would give the maximum benefits of language and cultural affinity, taxation, security, political stability and infrastructure.

Gartner recently released a list of 30 countries from three different regions — the Americas, Asia Pacific and EMEA (Europe, Middle East and Africa) — that will be hot favorites of the world’s largest buyers of offshore services in 2008.

Gartner used 10 criteria for choosing a potential for offshore or nearshore location for IT or business process outsourcing services. They are: Language, government support, labor pool, infrastructure, educational system, cost, political and economic environment, cultural compatibility, global and legal maturity, and data and intellectual property security and privacy.

The report also scored these geographies, based on these parameters, to give buyers a better understanding of which location is best suited for certain specific requirements. For instance, Slovakia and Romania, together with Russia and Ukraine, scored well on cost grounds.

Interestingly, of the three regions, the Asia-Pacific region, which includes India, China, the Philippines and Vietnam (the most favored outsourcing destinations), is not the region to watch out for. Surprisingly, the EMEA region emerges as offering the maximum number of options in terms of the countries, 13 out of 30.

In the report, locations such as Ireland, Israel, Northern Ireland and South Africa fare well for language skills, because of the quality and quantity of English-language speaking people. But other countries such as the Czech Republic, Slovakia, Hungary, Poland and Romania score high for the availability of alternative languages that address the needs of an increasing number of continental European buyers. 

However, because of strong European Union regulations and lack of government support, the region (EMEA) scored low. This calls for a need to create a conducive environment for EMEA nations to source to. While Russia leads in the quality of labor pool and educational systems, other countries in the group are relatively immature in these areas, with the exception of Israel, which is better of the lot.

There were few other surprises in the list. In the Americas, Canada topped the charts while leading in seven out of 10 categories. Also in the Asia-Pacific region, the entry of Pakistan and ANZ (Australia- New Zealand) was a revelation. Pakistan, in spite of an unstable political and economic environment, made it to the list. And interestingly, ANZ, which is sending a huge amount of work offshore because of their talent crisis, is also a part of the top 30.

“While these 30 countries demonstrated their suitability to develop or enhance their offshore service credentials, another 35 countries were also considered,” says Ian Marriott, Vice President, Research, Gartner. “They demonstrated initial activities aimed at establishing themselves as viable offshoring locations. However, they failed to make it into the top 30.”

The report also predicts that in ’08, the offshore spend will rise by 40 percent in the U.S.A. and 60 percent in Europe. 

Gartner's Top 30

Americas: Argentina, Brazil, Canada, Chile, Costa Rica, Mexico, Uruguay

Asia Pacific: Australia, China, India, Malaysia, New Zealand, Pakistan, The Philippines, Singapore, Sri Lanka, Vietnam

EMEA: Czech Republic, Hungary, Ireland, Israel, Northern Ireland, Poland, Romania, Russia, Slovakia, South Africa, Spain, Turkey, Ukraine

Source: gartner.com