Intermediation platforms like twago are based on the business model of bringing together service providers and customers. Customers are looking for suitable service providers that have the necessary skills for the completion of the projects and jobs, which they intend to outsource.

The number of potential service providers is large and continuously growing. It is noticeable that European businesses predominantly work with service providers from Eastern European countries, India, or China. The probable reasons for this are low salaries and the big pool of available, well-trained personnel.

How is the circle of service providers composed? In the following, the most important properties are outlined.

Country of origin of the service provider

With a large pool of IT experts, India is currently the most competitive and popular outsourcing destination on the global outsourcing and offshoring market. This is proven in several studies, which concentrate predominantly on larger companies with more than 250 employees.

One of these studies is “The Shifting Geography of Offshoring – The 2009 A.T. Karney Global Services Location Index”, which was conducted by the consultancy A.T. Karney. This study ranked the top 50 countries that are the most likely destinations for outsourcing and offshoring. The “Global Services Location Index” was determined with the help of 3 catagories:

1. Financial attractiveness of the country
2. Expertise and availability of the employees
3. Economical environment

With regard to these 3 categories, India has taken the top position before China, Malaysia and Thailand. Eastern European countries were not ranked within the top 10.

Rank	Country	Financial attractiveness	Expertise and availability of the employees	Economical environment	Sum
1	India	3.13	2,48	1.30	6.91
2	China	2.59	2.33	1.37	6.29
3	Malaysia	2.76	1.24	1.97	5.98
4	Thailand	3.05	1.30	1.41	5.77
5	Indonesia	3.23	1.47	0.99	5.69
6	Egypt	3.07	1.20	1.37	5.64
7	Philipines	3.19	1.17	1.24	5.60
8	Chile	2.41	1.20	1.89	5.50
9	Jordan	2.99	0.91	1.59	5.49
10	Vietnam	3.21	1.02	1.24	5.47

Source: The 2009 A.T. Karney Global Services Location Index

The “Global Outsourcing Report” by Minevich and Richter from 2005 shows similar results. In this report, the “Global Outsourcing Index” (GOI) as well as the “Future Outsourcing Index” (FOI) for the year 2015 was determined. The indices were determined with the help of the 3 categories costs, risks, and market possibilities. For the FOI, population growth, the growth of the gross domestic product (GDP), the supply of labor, and IT expertise were also allowed for. In the ranking of the GOI, India reached first place, followed by China, Costa Rica, the Czech Republic and Hungary.  First place in the FOI ranking (for 2015), however, is not taken by India, but China. Nonetheless, India ranks second before the USA, Brazil and Russia.

Rank GOI (2005)	Country	Rank FOI (2015)	Country
1	India	1	China
2	China	2	India
3	Costa Rica	3	USA
4	Czech Republic	4	Brasil
5	Hungary	5	Russia
6	Canada	6	Ukraine
7	Latvia	7	Romania
8	Russia	8	Belarus
9	Chile	9	Philipines
10	Romania	10	Canada

Source: Global / Future Outsourcing Index (Minevich/Richter 2005)

These studies show that the Asian countries lead the market for outsourcing and offshoring.

Companies practising outsourcing and offshoring

The service providers, with whom German companies cooperate, are located all across the globe. Several studies showed that particularly Asian countries with IT experts are of significance. Nonetheless, the global market of service providers is quite versatile, as good service providers can also be found in the USA, Canada, or France.

Generally, we can differentiate between different types of service providers: Leaders, Rising Stars and Rookies. Leaders in this context are large companies, which are already established on the global outsourcing market. Rising Stars on the other hand are smaller businesses, which are rapidly growing and show the potential of becoming the Leaders of tomorrow. Rookies are usually small, still largely unknown companies.

Of the global top 75 outsourcing service providers, the so-called Leaders, 39 companies are based in the USA and 16 in India. Overall, there are companies from 13 different countries in the top 75, which proves a global presence of service providers. It is noticeable that it is not an Indian company at the top of the list but the American Accenture. Second place is also taken by an American company: IBM. It is followed by Sodexo (France). Tata Consultancies, one of the most well-known Indian outsourcing companies ranks number 4 with 5^th place occupied by the India based IT company Wipro Technologies.

Amongst those who were ranked in the top 20 of global outsourcing providers are other well-known companies, such as Infosys Technologies from India (9^th place), Capgemini from France (10^th place), CSC from the USA (13^th place), Unisys from the USA (18^th place), as well as HCL Technologies from India (20^th place). It is noticeable, that it is predominantly IT and consulting enterprises, which lead the list of the top 75.

The ranking of the Rising Stars of outsourcing partners is lead by yet another American company: Synygy. Companies from India are not amongst the top 5. However, two other Asian countries were able to secure a spot in the top 5. Second place is taken by China Data Group (China) and Emerio from Singapore ranked number 5. This shows, that Asia will lead the future outsourcing market.

Outsourcing and Offshoring will continue to speed up and be used more intensively by companies. Outsourcing is especially interesting for IT service providers, since IT services are ranked second among all demanded service for outsourcing.