Offshore Outsourcing: Locating Your BPO to the Right Shores

On April 15, 2013, in Outsourcing, by Business Development Group
Offshore Outsourcing: Locating  Your BPO to the Right Shores

One of the most important issues in contention today is location— choosing the right offshore location for your BPO is indeed one of the most important key elements in any organization’s outsourcing initiative.

Organizations have used offshore outsourcing as a business strategy to reduce costs. Some have succeeded in this, while— unfortunately, quite a number— still fail in their outsourcing initiatives, even those that have once succeeded in previous outsourcing contracts. The fact is that, with outsourcing becoming a mainstream business strategy, competition has stiffened and the benefits of outsourcing are becoming harder to reap. One of the most important issues in contention today is location— choosing the right offshore location for your BPO is indeed one of the most important key elements in any organization’s outsourcing initiative.

Related Article: Cebu City among Top BPO Destinations in the World

According to Everest Group, 30 countries in Asia, the Pacific and Africa, have strengthened their government efforts in attracting BPO contracts and foreign investors, mainly by providing incentives and other advantages in regulatory framework. Coupled with the low labor costs in these locations, these could indeed be attractive to prospective clients. However, there are still quite a number of ‘hidden’ costs that must be understood and considered when choosing an offshore outsourcing location.

Each potential outsourcing location has its own set of associated costs and relevant issues that will affect the outcome of your outsourcing initiative. Some of these issues might not be immediately visible upfront but can have devastating effects on the outcome of your outsourcing program.

The obvious costs are— of course— costs of labor, property, facilities, utilities, and telecommunications. However, unexpected costs may crop up related to cultural, legal, infrastructure, as well as transitioning and offshore management costs.

Related Article: Philippines Emerging as Top Offshoring Destination for Australian Outsourcing Market

In his article “BPO Location is everything – but be careful,” Mark Atterby, senior writer for The Sauce BPO News, suggested a ‘right shoring’ strategy. He wrote,

“A successful ‘right shoring’ strategy is based on understanding which region or country is best suited to produce a certain product or deliver a certain service as well as all of the costs associated with doing business in that location. And don’t get stuck in the quality versus cost argument. On-shoring doesn’t necessarily mean better quality just as much as offshoring doesn’t necessarily mean less expensive.”

Related Article: BPO Location is everything – but be careful.

 

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