Offshoring in services is, to be sure, still going strong overall. But early pioneers of services offshoring are bringing work back home, having discovered that looking after customers and developing new IT tools are in fact a “core” part of business. For many firms, sending call centres overseas has turned into a nightmare.We just can’t get the accents right, confesses one Indian outsourcing executive. As with manufacturing, the advantages of outsourcing services are falling. For an American firm, the gap between the cost of employing an Indian software programmer and the cost of a local one will fall to under 20% by 2015, predicts Offshore Insights, a Pune-based advisory firm. All this could add up to the “Death of Outsourcing”, says a paper by KPMG, whose consultants have long advised Western firms on sending work overseas. The Economist
Oops! But it had to happen eventually. Driving operating costs down doesn’t help if you don’t generate enough profit and long-term value for customers.
I bet I know which Indian outsourcing executive is referenced in the article too!