Offshoring for Long-Term Advantage

The 2007 A.T. Kearney Global Services Location Index ^TM
Moving operations to low-cost countries offers a variety of advantages—from reduced wages for qualified workers to historically lower costs for businesses. The question is, are these advantages short-lived? Already, for some locations, the increasingly heated competition for talented and skilled workers has resulted in a rise in wages and attrition rates.

Findings in the 2007 A.T. Kearney Global Services Location Index^TM reveal that the relative cost advantage of the leading offshore destinations has declined almost universally. Nearly every country in the Index, even those that fell in the rankings, improved their absolute scores, thus confirming that competition among low-cost countries is intensifying. Increasingly, simply maintaining current performance levels is no longer sufficient for countries that want to attract (and retain) the fast-growing remote services business. In addition, this year’s findings suggest that while the wage advantage of offshore locations will continue for 20 or more years, this advantage will diminish as demand for skilled workers increases in offshore locations around the globe.

Now in its fourth year, the Global Services Location Index, or GSLI, analyzes and ranks the top 50 locations worldwide that provide the most common remote functions, including IT services and support, contact centers and back-office support.

Media coverage

Middle East Beckons as Outsourcing Hot Spot
The Wall Street Journal - 21 August 2007
In recent years, Egypt, Jordan and the United Arab Emirates have all broken into the top 20 most-attractive offshoring destinations, according to A.T. Kearney's Global Services Location Index.