Sourcing Monthly January 2019 – February 2019
Conclusion: This month, discussions regarding offshoring initiatives have been prominent following announcements by two vendors that plans are in progress to send work overseas. Though offshoring can be beneficial in terms of cost and the ability to obtain talent not available in the local market, the approach can cause difficulties for organisations. For instance, local protest or a loss of customer confidence can arise due to perceptions that offshoring practices are simple cost-cutting efforts which come at the expense of quality service. However, offshoring initiatives can be critical to meet demands for vendors to provide new, quality offerings in a highly competitive environment. The need to go beyond the local market is driven by more than mounting staff costs. Although risks associated with cultural barriers or customer backlash exist, benefits can be significant when providing unique and high-quality offerings. Vendors must achieve a balance between local and overseas services, as well as maintaining a positive view of offshoring as more than a simple cost-cutting exercise which results in low quality service, to an exercise that can enhance offerings resulting in improved services.