Low costs turn City into outsourcing hub

HCM CITY — HCM City’s emegence as a viable outsourcing hub is being attributed to a combination of its low costs and proactive local government measures to attract hi-tech industries, according to a report from global auditing and consultancy firm KPMG issued at the Nasscom outsourcing event in India this week.

"One of the reasons that HCM City has emerged as a favourable [outsourcing] destination is the proactive measures being taken to improve the city’s infrastructure, including telecommunications, power and transportation," says Tommy Woo, advisory partner of KPMG in Viet Nam.

"The city offers a cost advantage in terms of wages and a cost of living lower than some larger cities in Asia," says the report

The KMPG report, entitled "Exploring Global Frontiers", identifies 31 cities which are rapidly emerging as leaders of business process outsourcing (BPO) which, for a long time, had been dominated by such powerhouses as the cities of Bangalore or Chennai in India, or Shanghai in China.

BPO services include data entry and bookkeeping, photo processing, and customer service operations, among others.

"Traditional outsourcing locations, which have been at the forefront of the outsourcing boom, were always going to reach a saturation point. Corporations now need to know which locations to consider next," said Edge Zarrella, global head of IT Advisory at KPMG.

The 31 locations rated in the report range from well-known cities in developed countries to lesser-known cities in emerging markets.

Ten locations in the Asia-Pacific region offer such advantages as lower costs, young populations, plenty of government incentives and the lessons learned from other outsourcing centres in the region, says the report. — VNS

HCM City, in particular, has a number of software development centres, and the municipal government is planning to establish Viet Nam’s largest software park to offer attractive infrastructure and facilitate outsourcing growth in the future.

BPO could help further boost the development of Viet Nam’s own software industry, commented DTT Corporation general director Nguyen The Trung.

Source: http://vietnamnews.vnagency.com.vn/