by Sanjay Sharma
As we move into 2013, we are looking forward to the changes that are inevitably coming; there is an old saying “the change is only constant thing” . My experience tells me that wheel takes its own time to complete full circle. Something similar is happening in Outsourcing and in Global Sourcing. The Global Sourcing, which started some 20 years ago, is going to complete its full circle. The signs are there for us to see and that’s a change we will see soon.
There are many issues and reasons why the change will come and Offshoring and Outsourcing will be compared to On-shoring and In-sourcing.
The main reasons for change to take place are:
· Cost: Cost saving was one of the primary drivers for businesses to outsource and later outsource globally. As the cost of globally outsourcing is no longer justified, businesses will change their decision. Take example of BPO business which went to India in early 2000’s has either moved from large cities to tier II or tier III cities in India or moved to Philippines. Similarly by locating operations to tier III or smaller cities in North America, businesses are saving cost of operations. Lots of businesses have adapted to rural outsourcing, they now want to be on shore but in smaller/rural cost effective areas.
· Quality: As many businesses have started to realise that lower cost may result in lowering the quality of the product/services, especially if it is CRM or IT services, the impact is higher, businesses don’t want their customers to go for poor customer service as cost of acquisition is much higher than paying a bit extra and retaining business onshore and in-house.
· Control: Businesses don’t want control on their business activity to go, imaging if your call centre is located in Vietnam, back office in India, how much is your control over your business. The Executives spend much of their time and resources in travelling and communication just to be in control.
· Innovation: Most businesses want to constantly innovate and if their business needs to be not far from their customer base. They are willing to pay a bit extra cost and if they move their business to tier II & III cities in US or Canada, it is win-win situation for them.
With above reasons you would agree that next change is when businesses will go from off-shore to on-shore and out-source to in-source.
We at Global Sourcing Council are changing as well, I would like to welcome our incoming team very best and success.
[box type=”shadow” ]Sanjay Sharma is the former President of the Global Sourcing Council. Mr. Sharma has over 20 years of global experience in information technology, supply chain and project management. He leads projects on automation and deployment of latest information technology to bring cost efficiencies and reducing dependencies. Mr. Sharma’s articles were published in business magazines and publications on the subjects of procurement, supply chain and project management. He speaks at conferences, seminars and symposiums. He works as consultant for project management and global sourcing. In addition he teaches project management subjects.[/box]