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The Global Landscape Evolves: Offshoring's Risks and Opportunities

The popularity and proliferation of offshoring will continue to grow as business becomes increasingly globalized. Balance the risks with opportunities for rewards.

Spring 2011
(page 3 of 3)
From a geographic perspective, we predict that:
• North Africa will see increased investment for call center, shared services, and engineering activities.
• East Africa will see initial investment from BPO companies, then large multinationals with a growing presence in Africa.
• Indonesia will see increased investment in back office operations as the economy continues to grow and companies seek alternatives to India, the Philippines, and Malaysia for English language speakers in Asia.
• Business process outsourcers will hire students in Central America rather than graduates to avoid post-graduation compensation premiums and maintain cost competiveness with Asia. Additionally, BPOs will continue to seek out reduced market risk options in Central America, although it will require a cost premium.
• In Central and Eastern Europe, decreasing populations coupled with growing demand for talent will result in increased solicitation of secondary and tertiary regional markets.
• In South America, except those already considered for investment, few new location candidates will emerge as viable options with the exception of Colombia, which will likely experience increased solicitation levels.

Ask Area Development

How will offshoring and an increasingly globalized world affect your business? Submit your questions below to Ask Area Development and the article authors will respond.
The offshore landscape will continue to shift as investment conditions in legacy and emerging locations evolve. The fluidity of investment conditions and the speed at which locations cycle through maturity will require watchful monitoring to understand the implications of these trends and to realign the value horizon for a given location. The global marketplace's follow-the-herd mentality will force companies to create strategies to remain competitive in select locations. Opportunity and risk must be more proactively monitored to remain a step ahead of the market and competitors. Embracing offshore opportunities will ultimately improve operating margins and operating platform efficiencies.

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