Captive no more

For companies planning to move offshore in the late 1990s, choosing a strategy was never the tricky part of the decision. Most simply watched the leaders and followed suit. Who could question the successful offshore strategies of pioneers such as GE, American Express or HP? For years, no one did.

But going offshore five years ago was a lot different than it is today. Then, companies were forced to use a captive business model because there wasn’t a single country location that had a market of solid BPO service providers—not even India. Today, with a few more years of experience, countries have risen to the offshore challenge. Their people, capabilities and business acumen are improving, and sometimes even rivaling, that of the Western leaders.

In this article, the authors outline the reasons companies should no longer mold their offshore strategies according to what worked yesterday. They discuss the viability of working with highly capable outsourcing providers, and identify the economic and noneconomic benefits of doing so. They also recommend techniques for devising an offshore business model, explain why the best models are built on a solid economic case, address operational risk and business sensitivity, and acknowledge the maturing supply market.