Do not become a captive by a flawed “Captive Center” Strategy

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    There is an interesting research published by Forrester titled, “Shattering the Offshore Captive Center Myth” . This is a paid research.


    From the executive summary published on Forrester’s website and clippings quoted in the press, it appears that more than 60% of the captive centers in India are struggling with their operations. The researcher Sudin Apte alludes that, “During the past two years, more than 300 North American and European companies started their own offshore set-up to lower the costs of product development or back office operations. But, 60% of these operations are struggling due to spiralling costs, skyrocketing attrition and lack of integration and management support”.


    In my earlier post – “When to” and “When not to” get captivated by captive center options, it was indicated that captive center options work well when there is a clear cut strategic plan for the evolution of centers and the plan has elements of unlocking the value of captives through strategic associations or divestments. The value can be nurtured and unlocked when it is based on altruistic objectives of achieving process improvements, bringing new approaches developed by way of working on different processes in different business improvements & benchmarking (cross pollination) and not on the objective of cost savings alone or on seemingly personal ambitions such as expatriate employee urge to go back to India for family reasons, as pointed out in the report.


    Interesting findings and factors at play to get captivated operationally, personally and professionally! 


     

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