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China, India drive outsourcing growth

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The global shared services (SSO) is showing a vibrant increase as is the overall business process outsourcing (BPO) sector, which is expected to reach an estimated value of $146-billion by 2008. As these markets grow it is clear that China and India are the giants in this domain – and, indeed, across  a spectrum of economic activities. 

This is according to Neels van Tonder, CEO of domain specialised outsourced software developer, UCS Software Manufacturing, part of the UCS Group.
Van Tonder says a recent study by global consultancy, Frost & Sullivan, suggests that the worldwide SSO market was worth $930-billion in 2006. This is expected to grow at a compound annual growth rate of 15% for the next few years.
“There is certainly buoyancy in the overall outsourcing market. Interestingly the latest research shows that, in the SSO market space, India remains the dominant force. Behind India comes China, Ireland, Singapore, Malaysia, Mexico, Czech Republic, Poland, the Philippines and Canada. There is certainly a chance for South Africa to become a player in this market, but we are not yet up there with the big guns,” says van Tonder.
He believes that to stay competitive in the global economy it is imperative that IT organisations implement a ‘Chindia’ strategy.
“These two countries are currently altering the economic landscape, including in outsourcing. In fact, these two countries are changing the very future of technology.”
Gartner agrees, saying recently that by 2008 China will very likely generate intellectual property at a rate comparable to developed countries. It is expected to surpass the US as the population with the largest English capacity. But, in terms of language comprehension and proficiency, China will “remain a challenger, not the global leader”.