Over recent years there has been a great deal of speculation over the prospect of taking various business processes offshore to low cost economies. More recently, and to the concern of various trade unions, the speculation is becoming reality -major UK and multinational organisations are now "offshoring" a significant proportion of their business processes. This article explores the issues involved.
Whilst there are several highly-rated overseas locations -India, with its low cost base, favourable tax incentives (e.g. the Software Technology Parks of India regime), high quality English language skills, new infrastructure and mass of well educated people -is often the first choice for UK organisations.
As with any major project, a range of fundamental questions will need to be answered before the decision is taken to offshore to India. These include "Does the business case really stack up?" "What effect will this have on our brand and our customers?" "What are the risks and how are they managed?" "How will our employees and the unions respond?" "Who is going to help me?" and "How do we get out if things go wrong?" Once these questions have been satisfactorily answered, in our experience, one further question seems to come to the fore -"How are we going to structure this operation?" Five basic structures seem to be emerging and each is discussed below.