Will China Threaten Indian BPO? No Way, Jose

I recently came across this story which notes that "China is India's only credible threat as a global BPO location," according to Nasscom. In comparison, "While the emerging economies of the Philippines, Malaysia and Mexico [are] beginning to provide a viable alternative to India, they [are] not yet ready to challenge its dominance." I view this statement as an optimistic and dismissive study from a party that's obviously biased in the equation. After all, Nascomm is a trade association funded and supported by India's software and outsourcing industries. In fact, I've spoken to a handful of folks looking at -- or advising on -- voice and IT related outsourcing agreements recently that are favorably inclined to both the Philippines and Malaysia in certain areas. China, in contrast, appeals to no one that I've spoken with. The language barriers -- not to mention the management and cultural challenges -- are simply too large to cross at this point. Most important is the English question. Most Chinese with English skills are still difficult to understand in person, let alone over a phone. They've got a long way to go if they are ever to challenge India's dominance in the area. Still, I reckon that Indian firms will lose deals to providers in other regions which they've summarily dismissed along the way.

- Jason Busch

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