Look Out: Next-Gen Outsourcing Coming

Ready for this? Outsourcing of business functions is about to take yet another leap offshore.

The concept of business process outsourcing typically conjures up images of inexpensively hired college graduates dialing away at call centers in India, Singapore or the Philippines. It suggests software engineers rewriting arcane code in a technology park office in Bangalore, Beijing or some other place in the developing world for a fraction of the salary that their U.S. counterparts might earn for similar work.

That picture is now changing, as providers of business process outsourcing (BPO) services move beyond call centers and routine data-crunching tasks toward higher-end services. Among this emerging group of BPO firms is Evalueserve, which has its headquarters in Bermuda and keeps its main operational center in Gurgaon, some 10 miles outside New Delhi, India's capital. It also has a U.S. subsidiary based in New York and a marketing office in Austria to cover the European market.

What's the message here? The message is that cutting costs is not the only reason why outsourcing such tasks makes sense for its clients; it’s also about higher quality of work. "Among the more unusual emerging developments is that business process offshoring is not merely a way to reduce cost by migrating core functions," says a recent report by A.T. Kearney. "It is also a strategic initiative to take advantage of technological advances and the human capital available offshore to fundamentally restructure an organization's operating model."

What does this next gen shift mean for your area? Could it even further erode business and job growth? My initial reaction is that is quite possible.

Go here to read more.