Global Services Blog

Is it time to bury the work “Shoring”?

Posted on July 27, 2010 by Atul

From globalizationtoday.com.

IAOP’s Members Report a Very Important ‘Shoring’ Trend – There Is No Trend

As a global membership organization one of IAOP’ greatest resources is its ability to survey its members to capture the industry pulse – what’s hot, what’s not, and which way things are headed.

For example, as mentioned in my last column, it’s now clear from IAOP member surveys that the recent economic crisis has actually been good for outsourcing.  In January 2009, 36 percent of our customer members said that their companies were actually expanding their future outsourcing programs as a result of the economic crisis.  By September 2009 that number was at 47 percent.  By January 2010 it was up to 56 percent.  Then delegates attending the 2010 Outsourcing World Summit said that for them it was now 70 percent!  A clear statement of where the industry is headed.

But when t comes to ‘shoring,’ these same customers tell us that it’s a much more fluid dynamic as opposed to a trend.  In January 2009, 24 percent said that they were doing more offshoring as compared to only 9 percent who said they were doing less.  By September 2009, 31 percent said they were more focused on offshoring while 33 percent said they were more focused on nearshore and onshore providers.  By January 2010, the percent increasing their focus on offshoring was back down to 25 percent while the percent increasing their focus on onshore and nearshore providers was also down to 26 percent.  More like a tide then a trend.

The simple fact is that everyone is getting more global. In September 2009, 47 percent of our provider members said that their firms were expanding geographically and 42 percent said the same thing in January 2010.  In both surveys, about 30 percent of providers said they were establishing more local and rural centers from which to service their customers. So while it’s clear that the industry is getting more ‘global’ which ‘shore’ is shifting around a lot.

As both customers and providers become more global and distributed in their operational footprint and as the work becomes more fluid in terms of where it’s done, location distinctions are less significant in customer decision-making.  Costs are becoming more blended as well in today’s virtual, cloud-like, delivery model, making a pure-play offshoring decision less of a driver for many companies than it was in the past.

Colombia:  A Great Example

So, is the country of Colombia, where we just opened an IAOP Chapter, an offshore, nearshore, onshore, whatever-shore location?  You bet, all the above.

Citi is supporting Spain from call centers in Bogota.  Telperformance is supporting customers in Mexico.  Bilateral has customers in the U.S. being supported in Spanish and English from centers in Barranquilla and Bogota. And there are many more examples, including the growing ‘onshoring’ of work for Colombian companies right there in Colombia.

So, the question is:  Do we really want to keep talking ‘shore’ when we should be talking ‘solution’?  Is all the talk about shore hiding what really matters – value?

Just a thought. But what do you think?  Email me at michael.corbett@iaop.org with your thoughts about the affect of the recent financial crisis on outsourcing.  Also, let me know about examples of thinking differently on any aspect of globalization and business that you’d like to see explored in a future column.

Michael F. Corbett is the founder, chairman, and chief strategy officer at IAOP.  He believes it’s time think differently about the world we live and work in.