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A Buyer's Guide to Offshore Outsourcing

A Buyer's Guide to Offshore Outsourcing

Wondering where to send your call centres, application development and QA testing? Check the map for a worldwide comparison of prices, risks and other critical considerations.

VIETNAM: Up-and-comer.

Geopolitical risk.

English proficiency.

Average programmer salary: ($US7200/year; $US25/hour)Infrastructure: Poor infrastructure. Telecom charges among the highest in Asia, but falling.

Pros: It's possible in some cases to find hard-working, motivated programmers at or below the cost of India.

Cons: No low-cost, high-speed international data system yet. Lack of managerial and administrative skills can put the project management burden on you.

Insider tip: Much of the work being done here is small-scale stuff, but if local providers grow, so will the number of enterprise-level projects. Look for companies with overseas-trained project managers. Don't come here for legacy apps - not a Cobol programmer for miles.

SOUTH KOREA: Rookie.

Geopolitical risk.

English proficiency.

Average programmer salary: ($US25,440/year)Infrastructure: Good. Highly competitive telecom industry and government plans to cover the territory with fibre-optic networks.

Pros: Large percentage of population is potential IT talent.

Cons: More expensive than most developing countries.

Insider tip: Costs could outweigh the benefits here.

PHILIPPINES: Leader.

Gorpolitical risk.

English proficiency.

Average programmer salary: ($US6564/year)Infrastructure: Good. The Special Economic Zone Act of 1991 established IT parks to support the IT export industry, and the US military left behind a solid telecom structure here. However, bandwidth can be costly.

Pros: The English skills of this former US protectorate and its close US ties eliminate language and cultural problems. A large, skilled labour pool (universities churn out 350,000 technology-related degrees each year) works cheap.

Cons: Reports of political instability and corruption tarnish the Philippines' image even though most terrorist activity is limited to a very small region. Project manager supply doesn't meet demand.

Insider tip: It may be the best alternative to India - but make solid contingency plans.

MALAYSIA: Up-and-comer.

Geopolitical risk.

English proficiency.

Average programmer salary: ($US7200/year)Infrastructure: Good. Robust investment in Malaysia's Multimedia Super Corridor.

Pros: A pragmatic and far-sighted Prime Minister is paving the way for global IT leadership.

Cons: Lacking a large pool of capable programmers. Most of Malaysia's IT talent is imported.

Insider tip: While the government has been incredibly supportive of IT development in general, there has been no focus on the software/services export industry. Once that support is given, this market could grow.

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