India vs. China
A well-known economist suggested to me at the tail end of last year that China might be a little over-sold and that India wasn't getting the attention it deserves. That's no isolated view, of course, but I recall that conversation most days as more and more news about the country's increasing influence in delivering financial services to the UK surfaces.
The latest is that two thirds of NHS accounting and finance functions are to be outsourced, with the majority going to India.
It won't stop there either - with other government departments seemingly considering following suit.
If this trend continues - as it will - expect China to respond. It should be an interesting battle in 2007.
That's an interesting perspective given the fact Indian rates for routine tasks have doubled, for higher order functions x3 and staff attrition rates are running at 25% over the last 3 years. India is a 'mature' outsourcing market whic is good news. But cost spirals are hindering growth and infrastructure + bureaucracy (India has the most complex tax system in the world) holding them back from pegging costs.
Wipro et al have a real problem in trying to show Wall Street they can perform with the best yet running in ever increasing cost circles.
China might be an alternative but then there are plenty of eager, willing and hungry mouths in Estonia, Latvia and Hungary.
As an aside, I wouldn't expect NHS or its decision makers to be approaching the curve let alone ahead of it.
Posted by Dennis Howlett | February 10, 2007 4:37 PM