1. Globalization of Services: Where is the Next Batch of Customers?
Phil Taylor
Professor of Work and Employment Studies
University of Strathclyde
Nasscom BPO Strategy Summit
Leela Kempinski, Gurgaon, 23 August 2011

2. Structure and Speakers
Nicholas Hale, Director Sourcing Advisory, KPMG Sanjiv Kapur, Senior VP and Head, iGate Patni BPO Somnath Menon, Head of Operations and Technology, Mashreq Bank Phil Taylor, Professor of Work and Employment, University of Strathclyde, Scotland

3. Context and Reflection
The remarkable trajectory of BPO and offshoring from developed to developing countries
A core element in corporate cost-reduction, restructuring and re-engineering programmes
From tactical or responsive outsourcing to strategic even transformational offshoring
A radical shift in perspective from one-to-one migratory flows to…
…global service delivery in sourcing and service supply chains
Increasingly, multi-locational, multi-site strategies from the demand and the supply sides

4. Global Service Delivery Model
Capitalising on differing mixes of accessible skills and resources in diverse locations
e.g. a firm seeking lower cost solutions may
source simultaneously –
English-voice from India or the Philippines
Spanish voice from Mexico or S. America
IT/technical from E. Europe
H&R, A&F – the back office from India
Multi-lingual from Scotland, Netherlands
Functional mixes, reduced risk, time zones
For some companies a single-country solution
For most a ‘best fit’ scenario – ‘horses for courses’

5. Variable mixes of offshore, onshore, nearshore sourcing – what should matter is rightshoring
Location decisions are multiple, nuanced, complex
It’s not just cost arbitrage – but cost does matter
The rationale is cost plus availability of skills, depth of labour pool, accommodation costs, techno-structure, quality of performance, political stability, risk, industry maturity, financial assistance, quality of vendors, level of attrition, exchange rates etc.
Cost arbitrage
Talent and quality arbitrage
Efficiency arbitrage (post-recession)

7. Offshoring and Nearshoring
Protectionist debates missed the crucial factor – addressable market huge - not a zero sum game
Scotland and India an example of mutual benefit
Indian BPO - 107,000 in 2002 to 835,000 in 2011
Scotland BPO – 48,000 in 2002 to 100,000 in 2011
Symbiotic relationship between offshore and near-shore/onshore sourcing geographies - partners
Firms’ segmenting - what to be located and where?
Indian companies becoming global – 4 in Scotland – Hinduja GS, Hero-ITES, Wipro, Intelenet
23 BPO companies in Scotland HQ’abroad – 65 contact centres provide foreign languages

8. Sourcing Landscape
‘The World is [not] Flat’ a la Thomas Friedman, but lumpy and bumpy
India and then the Philippines the most important geographies by far in English, then who...?
No magic bullet, no secret geography that can provide a one size fits all global sourcing solution
Caution against simplistic location indices
One list puts Thailand & Vietnam above Philippines – India below Estonia for business environment
Many destinations not fulfilled potential or not scalable – but are important niche complements

9. Latin America, West Indies, Eastern Europe, Egypt, UAE, China, South Africa etc, etc.
Impact of recession has been profound – cost reduction, efficiency gains without quality loss
Clients demanding and vendors offering
Efficiency arbitrage
Self service, web chat, labour utilisation
Globalisation actually heightens the importance of differences between places and people
We are still at the very beginnings of rightshoring = with different combinations of location