Chinese cities will overtake Bangalore, Manila and Mumbai as the highest ranked global offshore delivery centres by 2011, according to an index developed by analyst firm IDC.

The ‘Global Delivery Index’ (GDI), released this week, is comprised of data from more than 35 cities in the Asia/Pacific region and is based on a comprehensive set of criteria such as cost of labour and rent, language skills and turnover rate. Some of the cities assessed in the index include Adelaide, Bangalore, Dalian, Hanoi and Kuala Lumpur.

While the index found that Indian cities were still ranked highly as offshore delivery leaders, Chinese cities were seen to be rapidly gaining on traditional locations.

Conrad Chang, Research Manager for IDC's Asia/ Pacific BPO Research, commented: "There are different risk factors to consider when evaluating outsourcing, offshoring, onshoring, and nearshoring. Some factors are obviously more critical than others and the GDI takes that into consideration. What differentiates leading cities from the rest is their focus on deal-clinching factors, and the GDI weighs that more heavily than other factors".

According to the report those cities placed in the top 10 for global delivery focused more on deal-clinching factors. Some of these factors were agent skills, political risk, cost of labour and language skills. Other factors that are also important in global delivery according are resources & skills, infrastructure, and government factors – all of which are well balanced among the leading cities.

According to the firm the following issues rank highly among key decision makers regarding business decisions for global delivery:

· Confusion about offshoring, onshoring, nearshoring and how to leverage different delivery methods for optimal results.

· Is India the only viable option and what are the other alternative global delivery centres?

· How to objectively compare and quantify risks between different locations, for example, is Bangalore better than Dalian, and what is the basis for comparison?

· What is the potential of different locations for the future, particularly second tier locations such as Vietnam and Malaysia?