Gartner warns on emerging outsourcing destinations

IT managers need to perform rigorous due diligence when choosing new outsourcing destinations, as the apparent benefits can sometimes be outweighed by the relative immaturity of some regions, according to the latest Gartner research.

The analyst firm has revealed its top 30 global destinations for outsourcing with an exclusive focus this year on emerging nations, in its 30 Leading Locations for Offshore Services, 2010-2011 report.

The main challenges for UK firms looking outside of India are that less well-known markets are likely to be focused on more niche skills, according to report author Ian Marriott.

There could also be problems around IP protection and data security in countries such as Vietnam because their legal systems have yet to catch up with such challenges and requirements, he cautioned.

“If a firm used to outsource to India and has built up certain expectations then they may be in for an unpleasant surprise,” he warned.

“However, they may be in for a pleasant surprise, but it must be well managed and some companies are not doing this. It’s all about the due diligence.”

He recommended talking to government representatives and industry associations to glean as much information about a potential outsourcing destination as possible before making a decision.

For UK firms, Marriott said there are relatively mature providers to be found in Bulgaria, the Czech Republic, Poland, Hungary, Slovakia and Egypt.

However, he explained that certain destinations may be appropriate for only specific outsourcing operations, for example Egypt is good for call centres, Poland for business processes and the Czech Republic for application services.