Outsourcing takes a full cycle - Collaboration through Reverse Outsourcing
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BPO analyst firm Nelson Hall released a comprehensive BPO market study entitled “Global BPO Market Forecast: 2008-2012”, the study forecasts the growth and trends in BPO services globally by service line and geography. Nelson Hall forecasts the BPO market to reach $450 billion by 2012. The study reveals that economic conditions will speed up globalization, with organizations not only using offshore outsourcing to reduce costs but also hasten their development capabilities in emerging markets to take advantage of growth opportunities.
Current market conditions support Nelson Hall’s findings as businesses are increasingly sending more work to US based outsourcing companies. Organizations continue to position themselves in emerging economies, but as these organizations try to escape surging salaries and currency fluctuations they now see the real benefits of outsourcing. This is where outsourcing takes a full turn, as companies around the world collaborate through “reverse outsourcing”. Reverse outsourcing happens when India or other countries outsource jobs to US companies.
Reverse outsourcing is not new in the BPO industry. In fact, back in 2007 Indian firms -faced with high attrition rate and rising wage issues- were scouting for centers outside India and were looking at near shore alternatives such as the US and UK. These countries has a huge number of Spanish and German speaking individuals, and since this is their native language Indian firms need not worry about their salaries, thus, being cost effective.
Outsourcing is often criticized for causing loss of jobs in the US, but a recent study shows that “there has been very little data available through which to assess how offshoring has affected US-based information technology workers”. The study’s survey results shows that “40% of high-technology firms offshore work, and about 30% of all firms that offshore send IT work overseas. Among the IT workers surveyed, about 8% report ever having experienced offshoring-related job displacement, double the average offshoring-related displacement rate across all other worker types, but still implying an annual offshoring-related displacement rate of only about 1-2% per year”.
Today’s collaborative working environment through reverse outsourcing has been predicted in the past. A study conducted in 2004 by the Breman Institute of Industrial Technology and Applied Work Science (BIBA), Germany and the Luleb University of Technology, Sweden has suggested “Collaborative working environments (CWE) are widely recognized as representing the next step in the development of collaborative technologies over the coming decade”.
In 2005, the European Commission said that “collaborative tools combined with remote management techniques offer a new field of opportunities for borderless cooperation between corporations and skilled workers across Europe and around the world. Those geographical outsourcing initiatives which have generated fears for job losses have also proved, in well managed situations, to be source for new investment and business opportunities. Cases of what could be called ‘reverse outsourcing’ are emerging and represent an unexpected return for those countries which have explored new ways of collaborative working”.
Outsourcing is just another form of free trade which increases wealth in the economy. Employing workers at a lower cost allows Asian, US, and UK companies alike to be more efficient and productive, and this is the reason why the reverse outsourcing trend offers a win-win solution for outsourcers and businesses worldwide.
Author: Kim G.
Tags: Reverse Outsourcing