Introduction

Asian countries have evolved as offshore destinations to provide business process (primarily in English) and technology services. Lower costs coupled with good English language skills and large, skilled talent pools are the key drivers of offshore market growth in Asian countries. Given this market growth, the location landscape in Asia is rapidly expanding to new countries/cities.

Leading global suppliers/captives have set up delivery centers in numerous cities (~40) in the region. However, these cities have different leverage points across multiple factors relevant for location selection. (e.g., costs, labor pool, functional, language skills). The presence of multiple city options with significantly different characteristics drives complexity in location selection decisions in Asia. This research provides perspectives on the relative attractiveness of Asian locations for Business Process Outsourcing (BPO).   

Scope 

• Analysis includes 40 cities across 6 countries, including China, India, Indonesia, Malaysia, Philippines and Singapore
• Cities include: Beijing, Changchun, Chengdu, Dalian, Guangzhou, Hangzhou, Hong Kong, Shanghai, Shenzhen, Tianjin, Wuhan, Ahmedabad, Bangalore, Bhopal, Chandigarh, Chennai, Coimbatore, Hyderabad, Indore, Jaipur, Kochi, Kolkata, Lucknow, Mangalore, Mumbai, Mysore, Nagpur, Nashik, New Delhi, Pondicherry, Pune, Thiruvananthapuram, Vadodara, Visakhapatnam, Jakarta, Kuala Lumpur, Baguio, Cebu, Metro Manila, Singapore
• This report is applicable to all industries
• This report is applicable to both buyer and supplier organizations 

Contents

This report evaluates city locations across Asia and assesses their relative attractiveness based on a four step methodology:

• Step 1: Made assumptions to reflect functional, language, and scale requirements of a typical BPO center
• Step 2: Deprioritized cities that did not meet minimum criteria for setting up a center (i.e., stability, security, risk of natural hazard, connectivity, infrastructure support)
• Step 3: Of the remaining cities, deprioritized those that did not have sufficient labor-pool and language skills to support center’s requirements
• Step 4: Characterized the remaining city options in terms of cost-risk tradeoffs. We chose representative cities across each cluster for this characterization. This included analysis of:
  • Total cost of operations (salaries, real estate, equipment, telecom, etc.)
  • Key risks (environmental risks, maturity/time to market, labor availability, language skills, etc.) 

This report is divided into six sections.  The first four provide a detailed discussion of the methodology steps with supporting data and analysis; the fifth provides the reader with additional considerations for location selection and tips for implementation; and the last section provides one-page city profiles of cities included in the report.