Offshore outsourcing to labor intensive markets like India, China, Philippines and lately the North African region with relatively competitive labor wage rates, is most evidently justified for long term projects that span several years and stipulate operation and human scalability. Only in such scenarios that offshore economies of scale can leverage the costs incurred as a result of high travel, labor training and project management, which are common costs, associated with offshore development models. However, cost is not the only driver to offshore outsourcing, it is the hunt after scalable pools of talents and skill sets is what has been fueling the off shoring industry.
The onshoring model on the other hand contends on services that can not lend itself to offshoring, due to the sensitivity and/or complexity of the service components. Additionally there are the small to medium scale projects that an offshore model does not represent an added dollar value to it. The Government agencies are also another sector that has rising needs to outsource certain functions in an effort to elevate national service levels as well liberate resources to focus on core functions, yet are not able to offshore.
The cost benefits from the onshore delivery model more specifically in the U.S, are to further increase, after the US broadband stimulus adopted by President Obama administration early this year. So instead of setting up a contact center facility in New York or Washington DC where the cost of living is quite high, a contact center facility can be relocated to a rural area of Iowa for instance that was initially under served by broadband prior to the broadband stimulus program.
From a BPO service provider perspective, research analysts firms like Gartner and IDC are vying the sustainability of the pervasive offshore outsourcing models that rests on a "labor intensive" approach. With the continuous boom of technology platforms that automate and merge processes the conventional outsourcing model could lead to futile human capital and scalability could reach a point of serious glitch. This reinforces the significance of creating “Global Service Delivery Models” that utilize geographies and technologies as well, mitigating the risk of reaching a complete halt of service delivery as technologies advancements abate the cost and human scalability factors.
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The onshoring model on the other hand contends on services that can not lend itself to offshoring, due to the sensitivity and/or complexity of the service components. Additionally there are the small to medium scale projects that an offshore model does not represent an added dollar value to it. The Government agencies are also another sector that has rising needs to outsource certain functions in an effort to elevate national service levels as well liberate resources to focus on core functions, yet are not able to offshore.
The cost benefits from the onshore delivery model more specifically in the U.S, are to further increase, after the US broadband stimulus adopted by President Obama administration early this year. So instead of setting up a contact center facility in New York or Washington DC where the cost of living is quite high, a contact center facility can be relocated to a rural area of Iowa for instance that was initially under served by broadband prior to the broadband stimulus program.
From a BPO service provider perspective, research analysts firms like Gartner and IDC are vying the sustainability of the pervasive offshore outsourcing models that rests on a "labor intensive" approach. With the continuous boom of technology platforms that automate and merge processes the conventional outsourcing model could lead to futile human capital and scalability could reach a point of serious glitch. This reinforces the significance of creating “Global Service Delivery Models” that utilize geographies and technologies as well, mitigating the risk of reaching a complete halt of service delivery as technologies advancements abate the cost and human scalability factors.
Resources
CallCentertimes.com
