October 18, 2011 6:15 AM
As service delivery destinations have become increasingly globalized over the years, selecting the optimal location for a sourcing engagement has become a more and more complex process. While the number of possible locations has grown dramatically, each destination is also busy self-promoting, creating a competitive atmosphere that further magnifies the difficulty of your decision.
What might appear to be a relatively straightforward choice based on general awareness of popular countries and cities, selection is — in reality — a much more nuanced process that requires ever-more-careful consideration.
Here are the TPI Top 5 considerations for selecting your next sourcing location:
- Risk. Amid ever-increasing economic and geopolitical uncertainty, risk assessment is critical in selecting an outsourcing location that ensures business continuity. Thorough risk assessment requires an objective, detailed review of the economic, political, civic, and natural calamity-related characteristics of each location.
- Human capital. The availability of the talent pool in a specific location will determine the scalability of your sourcing operation over time. Deep insight into the suitability of offshore service delivery potential, the level of training required, and the demand-supply balance in terms of density of offshore employment will help you make the best decision.
- Infrastructure. Infrastructure can play spoilsport when ensuring a robust, secure, scalable and dependable operation. Determining the state of the current physical and technology/telecom infrastructure, the historic level of investment in infrastructure and a realistic sense of projected investments are all vital to your final destination decision.
- Maturity. Understanding a specific location in the context of the entire offshore service delivery industry will help you assess and define its current maturity level. It’s important to gauge the industry as it has developed over time: how it has progressed over the past five years, its relative current state, and its likely future state. In some countries, such as India, domestic sourcing is growing rapidly in some delivery locations that were traditionally considered “offshore,” further adding to the maturity and complexity consideration of your location decision.
- Cost. Last, but not least, in establishing the business case for your location selection, take into account the delivery cost per full time equivalent (FTE) or per transaction. Given the rapidly changing dynamics of various locations around the world, it is essential to understand the “go forward” view of your overall cost. Wherever you ultimately elect to go, you don’t want to revisit that decision in the near future.
Originally posted by Dinesh Goel, Partner, TPI, +91 98458 93787 on Consider the Source
TPI is the leader in guiding organizations through effective, lasting transformation of their business support operations. Around the globe we have helped hundreds of clients reduce operating risks, streamline complex operations, improve the cost of support functions, achieve sustainable improvements and make competitive gains. Decisions to change and successful transition of existing operations to new service delivery models is hard — and replete with risks. While the decisions are never formulaic, the hard-earned lessons of hundreds of prior evaluations are invaluable.
Posted by Sue Ansell at October 18, 2011 6:15 AM