Tag Archives: Outsourcing Industry

India & China Compete for Outsourcing Revenues

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China and India compete for outsourcing work.
Amoung the top several outsourcing nations, India ranks #1 with China and the Philippines next in line.  India’s outsourcing revenue from April 2010 to March 31st 2011 is expected to be US$60-62 billion and was roughly 50 billion the previous year. China’s outsourcing revenue was roughly 36 Billion last year, but is expanding faster than India’s outsourcing revenue.  The future is showing that in addition to China, many other nations are going to be catching up to India in the outsourcing industry.
Indian Outsourcing
Although India is currently the world leader in outsourcing revenue, there are many factors that are governing its growth rate.  Factors leading to a slowdown in the expansion of Indian outsourcing lie in high attrition rates, poor infrastructure, lack of cultural affinity wiht the West, and rising wages.  However, factors in India’s favor include: a reputation of being great at outsourcing, an emphasis on enforcing patent laws, and a diversity of outsourcing services that goes well beyond call centers and IT.  Indian companies provide dozens of outsourced services including data entry outsourcing, legal process outsourcing, market research, payment processing, accounting, web design, SEO,  and pharmaceutical research which is one of India’s newest outsourcing growth industries.
Pharmaceutical analytical services performed in India are less expensive, better quality, have shorter delivery times, and less downtime than if done in other countries. Additionally, intellectual property protection is excellent in India while China has a questionable reputation in this regard.  Pharmaceutical outsourcing is one of India’s new growth industries which is expected to become a multi-billion dollar industry in India in only a few years.
Although the Chinese can compete with India for IT services, and Filipino call centers are gaining market share from India, India has a safe position in the outsorucing industry because they offer dozens of other outsourcing services which are not threatened by foreign competition.
Chinese Outsourcing
China has paved the road for a bright future in quickly growing its outsourcing industry. China has incentives for industries providing outsourcing services which helps to stimulates growth in this sector.  Incentives include removing taxes on outsourcing businesses.
China can easily compete with India for IT work, however China lacks workers with good English language skills which is a huge deficit for many types of outsourcing work. 
One of the main reasons China has such a promising future in outsourcing is that China is investing in new infrastructure in ecomonic zones faster than any other country.  New roads, dams, buildings, and other infrastructure are being built really quickly in China.  China’s capacity for getting projects completed quickly is one factor that works to their advantage.  China has also worked on building good internet connections and developing workers technical skills.
Putting skills, prices, and infrastructure behind, China’s outsourcing industry is growing at 30% while India’s is growing at 14%.  China’s overall economic growth has been a few percent faster than India’s over the last few years, and their growth in outsourcing is also surpassing India’s.
Filipino Outsourcing
The Philippines is a distant third in the global outsourcing market.  Their services are mostly confined to call center and medical transcription work due to their good command of English.  The Filipino call center industry is neck and neck with India, both commanding slightly less than 6 billion per year, but the Philippines looks like it will be taking the lead, once again to their excellent language skills and cultural closeness to the United States.
Its hard to see where the outsourcing industry will be in 2020, but my guess is that China will dominate with India in second place.  Filipino, Indonesian and African companies will also probably gain a higher overall percentage of market share leaving India with a relatively stagnant revenue in the long run.  The overall outsourcing industry will most likely grow tremendously in the next ten years, but Indias percentage of the total looks like it will be shrinking slowly over the next decade.

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Office Prices and Outsourcing

Categories: Outsourcing Articles | Tagged , , , , | 1 Comment

Office Prices and the Outsourcing Industry

India’s main problem with outsourcing is that the rents are getting so high, that Indian outsourcing companies must raise their rate for outsourced work to be able to cover their costs. Looking at a list of global office occupancy costs worldwide from scribd.com, I can share some of this information with you.

PSF – costs in dollars per square foot for office space in 2010.
Numbers have been rounded to the nearest dollar

Hong Kong 161
London 130 (West End)
Tokyo 101
London 62 (Docklands)
Mumbai 60
Delhi 59
Singapore 59
New York 42 (Midtown)
Los Angeles 39
Madrid 37

The irony is that in places like New York where incomes are roughly five times what they are in Mumbai for similar work, the price is 43% higher in Mumbai for office space. In the long run, America has many advantages that lead to national economic stability. We have endless land, and fast roads and airports that connect every single corner of the country conveniently to each other part of the country. There very few strikes effecting transportation, and political stability is something we take for granted. India has none of these advantages. It will take India 40 years of hard work to catch up to Western countries in terms of infrastructure.

One aspect that doesn’t show up in the above quoted statistics is that the data is for certain neighborhoods where offices are generally located. There are other parts of the above metros further away from the downtown that have less expensive prices. For example, in Delhi, it is $59 psp in the business district, but I’m looking at an ad in Noida where 1500 sf of office / factory space are being offered for rps35,000 / month which translates into less than one dollar per square foot per month. So, prices can vary tremendously within the same metro area depending on conditions.

High office prices have run many call center outsourcing businesses out of Bangalore, Mumbai, and Chennai, leading them to outskirts of Delhi, Assam and other areas where land is plentiful. Mumbai is on a peninsula, making land a scarce commodity, especially with the lack of skyscrapers which help to conserve land. Bangalore is surrounded by hills and mountains making growth difficult. Chennai is bordered by an ocean on one side making expansion possible only to the West. But Delhi has land around it and remote parts of India still have cheap land to expand to. So the future of Indian outsourcing work seems to keep migrating further and further away to where the cheap land and labor is. In another few decades, much of the outsourcing work will be redirected out of India entirely, perhaps to Africa, Bangladesh, and other areas.

Blog Title Optimization — This Can Revolutionize Your Blog Traffic!

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Secrets of “Title Optimization” on the Internet

What is Title Optimization?
If you are a blog writer who regularly consults Google Analytics, you will realize very quickly, that certain blog titles do better than others, EVEN when the content of the blog entry is weak. You might get endless traffic on a very simplistic blog that has a title that people just want to click on. You might even get repeat traffic on such a blog. Or, perhaps, it shows up well on Google because of the keyword phrases that you used in the title! Keyword variations are very competitive on Google, but keyword phrases with four words or more can get on the 1st page easily! (remember that)

How do you do Title Optimization?
The best strategy for blog title optimization is to just write lots of titles, and see which ones are getting clicked on the most. You could write a single article, and rewrite it slightly differently several times — each with a different title, and see which variation did the best. This is called, “Optimization”. For the sanity of your readers, I would space out these articles at least four days apart. See which variations did the best, and then create incoming links from other blog articles you wrote, and from pay-per-click sources on social media sites or other mediums to your blog entry.

My experience
I learned through trial and error, that you should write lots of different types of blog entries within your industry and areas of expertise. I wrote about 400 blog entries relating to the outsourcing industry as well as general management and marketing as these apply to outsourcing. What I learned was that roughly 5% of my articles became popular on Google. Not exactly viral, but they are getting seen and clicked on two years after the fact. These blog articles are generally about marketing your services or getting a job. However, one was about transportation — who would have guessed. Additionally, even though we know that marketing entries work well on my blog, we don’t know which titles will do well until we try them!

Try different titles, wait and see
Just try out different subject matters for blogs, and try different titles. You do not know which will become popular until you try. If someone links to your blog from their site or their blog, you could become an instant hit overnight! Just try different things and see what happens. Subject matter optimization is as important as title optimization. Subject matter is the general topic you are writing about, and certain topics will be more popular with your crowd than others. Pay attention to that! But, certain wording variations for titles work better than others, and you should make a study of which word combinations get the best results!

If something works — repeat your success
If you have a successful blog title, write different variations on a theme. Write other related articles on similar yet different topics. Those other articles could become popular too, and you can link these related articles to each other for better luck as well! My most popular article was about getting business for your call center. I have since written about 20 other articles with unique and specific tips for getting call center business. Many, but not all of those articles became popular in very little time.

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Outsourcing has a ceiling – a limit of skilled workers

Categories: BPO | Tagged , , , | Leave a comment

Outsourcing is a popular way for companies to get specific tasks done overseas for a fraction of what it would cost domestically.  However, outsourcing destinations such as India, Philippines, and other countries have a finite limit of skilled human resources.  Global outsourcing is growing in many countries by a rate exceeding 10% per year, often much higher than that. However, it is less clear how quickly the labor force can be replenished. India has been having a skilled labor shortage for several years, and the consequences are devastating for many companies. 

It is common for Indian workers in the outsourcing industry to jump from company to company seeking better benefits, better pay, and overall better conditions. Each time an employee jumps, it costs the mother company a pretty penny to retrain a new employee to fill their space.  In the long run, it seems obvious that higher wages will be the reality for BPO workers in India in many sectors.  Supply and demand are always in flux in any industry, but eventually, reality sets in, and bosses realize that they need to pay workers well to keep them.  Additionally, they need comfortable recreation rooms, delicious lunches, and maybe even prettier secretaries.  These workers these days have endless agendas on their check lists for who to work for!

One of the solutions being offered in the Philippines is more free educational courses.  Prospective employees would be trained to do outsourcing work, and English teachers will also be trained. The only way to bring more trained employees into the workplace is to train individuals who are not already trained!
On a sadder note, India is filled with semi-literate job-seekers who are simply not qualified for any type of outsourcing job.  There doesn’t seem to be a place where they can go to quickly brush-up on their language skills.  Sentence structure, grammar, and punctuation are all missing in their writing.  It would occur to many that thinking skills among these semi-literate individuals are also vacant, although that is an extrapolation!