Cost Optimisation - A Review of Offshore Service Centres

A follow up to my short article "For Stages to Cost Optimisation" https://www.dhirubhai.net/pulse/four-stages-cost-optimisation-mark-cox/

Over many years, millions of office jobs in High Cost Locations have been migrated to Low Cost Locations (LCL’s). 

Some organisations have taken the opportunity not only to offshore (or near shore) but to also review their, delivery models, processes, roles and levels of automation prior to off shoring, however, the vast majority have not.

The lift and shift mentality is driven by short term gain through wage arbitrage and even though off shore service centres are dogged by wage inflation, currency fluctuations, inefficient cost transfers and high staff turnover, there are still good cost savings to be had.

Initially services centres performed straight forward processing activity but over the years they have accumulated higher value tasks and have grown into large organisations with increasing cost bases.

On shore locations have largely gone through efficiency and productivity drives which means that further opportunity is limited, however, because off shore often get by passed when it comes to these initiatives, they are ripe for cost reduction.

How do we tackle this? 

In short we need to restructure the delivery model and optimise the value chain in much the same way we have looked at this for our onshore locations.

Mark Cox - Remote Consultant