The end for offshoring – the rise of global services

HFS Research always has an interesting view on the outsourcing market. Take the latest blog from this weekend just gone titled ‘Why today’s outsourcing industry is a sham.’

These are strong sentiments indeed. The HfS team love to be forthright, even controversial, in their views, but how could they declare that the very industry they write about and analyse is a sham?

If you delve into their argument it is very simple and it is something that I have been arguing for a long time myself. That there really is no such thing as an ‘outsourcing industry’ – there is a global service industry with a great variety of expertise and services from different companies – and most of us working within what is often called the outsourcing business are actually global business service professionals.

Why does this matter?

Away from industry professionals there remains quite strong hostility to outsourcing and especially offshore outsourcing (offshoring). No matter how many economists try to demonstrate the value of offshoring there are many who instinctively just don’t like it. Walk the avenues of London or New York and ask the man on the street what he thinks of offshoring and you will know exactly what I mean.

These terms come with baggage. It may seem crude, but consumers associate outsourcing with retrenchment by a company and replacing those jobs elsewhere in the world – almost always in a lower-cost environment. And if consumers retain these prejudiced views of outsourcing then companies actively involved in outsourcing can find it difficult to explain their actions.

But so much has changed and the HfS comment reflects many truths. Companies in general all over the world are far more international today and services are far more networked – it is easier to deliver some services local and some remotely. I remember talking to a senior banker recently who said that his company operates in almost 90 countries – offshoring is meaningless when the company has operations all over the world. A service can be delivered from anywhere to anywhere.

At Teleperformance we currently operate in 49 countries. In some countries we deliver to local clients and in some there are remote clients, but in all cases we are operating as global service professionals and we win business by being the best in the marketplace at what we do.

HfS research says that they – and many of their clients – would like to remove the word ‘outsourcing’ from the dictionary. I tend to agree. The world may not yet be flat, but the global service sector has moved beyond such crude terms as offshoring.

HfS is right, today we are global business professionals.


Photo by Mahdi Abdulrazak licensed under Creative Commons

This entry was posted in Current Affairs, Industry Analysts, Outsourcing and tagged , , , , , , , , , , , , , , . Bookmark the permalink.

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