Reports of the death of shared services offshoring have been greatly exaggerated
Offshoring shared services is a natural, integral, and vital part of international business growth, and we believe that reports of the death of shared services offshoring are greatly exaggerated. Properly planned and implemented, an offshoring strategy for shared services can help drive competitive advantage in an increasingly demanding global economy. In fact, we believe that the trend towards offshoring will continue to accelerate in the years to come.
While there are many factors to consider before deciding whether to offshore shared services, the growth of offshoring is proceeding at a quickened pace and will continue to hold great promise for companies that do it right. In this article by Mark Klender, principal, Deloitte Consulting LLP, and Spencer Schobert, senior manager, Deloitte Consulting LLP, we discuss nine of the most common myths about shared services offshoring that may discourage companies from pursuing an offshore model:
- Offshoring shared services has not proven to be successful
- Rapidly increasing wages will erode labor cost arbitrage to the point that most offshore locations will offer very little cost advantage
- Offshore labor pools have been exhausted — the talent has already been taken
- Only a few select locations offer the best operating environment for shared services
- A successful location for my competitor will be successful for me
- The risks in offshore locations are too high and the cost savings in less risky locations do not justify the effort
- Shared services are difficult to manage remotely
- Shared services will eventually be outsourced to third parties, with many companies shedding their captive centers, so why bother to develop a company-operated offshore SSC
- Offshoring shared services is bad for the U.S. economy
Download the full article to learn more about how reports of the death of shared services offshoring have been greatly exaggerated.