CIO Insight Blogger Allan Alter writes with a provocative title about a new Forrester Group Study of Captive Offshoring Centers – Captive Offshoring Centers are Imploding.
Allan cites the Research Study saying that the cost per person per month of a Captive Offshoring Center is about $4,944 as compared to a Third Party Service Provider at about $4,321. He also cites rising costs, turnover problems, lack of integration, etc. in justifying his title that captive centers are imploding!
I wonder if he took into account a recent trend in many parent companies in spinning out their captive centers, and MAKING A LOT OF MONEY out of them as GE did a few years ago with their GENPACT unit in India. With the amount of investment money available from very large investors like Carlyle Group, The Blackstone Group and General Atlantic Partners, saving money may not be the only motive in creating Captive Offshoring Centers. Some create new companies out of them and end up selling pieces of them or the entire organization!
Interesting facts and even more interesting observations!