Magazine article Management Today

Wish You Were There?

Magazine article Management Today

Wish You Were There?

Article excerpt

Farming out whole departments such as customer services to cheaper locations abroad has long been a way for companies to cut costs and gain efficiencies. But the choice goes way beyond Bangalore. Ian Wylie suggests some unlikely new outsourcing hotspots.

Outsourcing is one business that is booming, thanks to the global economic slowdown. After all, offshoring 'non-core' and 'location-agnostic' activities such as IT, customer service, payroll and even some HR functions to a low-cost, high-skilled developing economy is a great way of saving a lot of money without, as they say, 'negatively impacting your service set'. At least in theory.

And according to a report published by KPMG, Exploring Global Frontiers, firms are now looking beyond the usual outsourcing suspects such as Bangalore and Chennai towards a new generation of even lower-cost, higher 'value-add' destinations. Places where it might be possible to outsource not just call centres and number-crunching jobs, but even more high-end functions - R&D, for example.

So to help you keep up to speed and ahead of the competition, here's MT's guide to the pros and cons of a few of the new, new outsourcing centres. You might want to have your atlas handy, as some are pretty out-of-the-way places: but remember, you saw them here first.

GDANSK, POLAND

How to find it: On the Baltic coast, an hour's flight from Warsaw.

Vital stats: Population 458,053, rainfall 60 cm, literacy rate 99.8%, Polish, English, German, Russian spoken.

The good: Strong foreign-language skills, infrastructure improvement projects planned for European Football Championship in 2012.

The bad: Emigration has depleted workforce size. It's prone to flooding.

Already there: Lufthansa, Intel, Reuters.

Don't mention: Michael O'Leary. Dismissing expansion into eastern Europe, the Ryanair boss said: 'Take Gdansk. Who wants to go to Gdansk?' But it quietly appeared on Ryanair's route map a year later.

Call-centre script: 'Niestety, pani. Obawiam sie, ze komputer jest na gwarancji ... ale moge dac Ci wiele dobrego hydraulika.'

Translated 'Sorry, madam. I'm afraid your computer is out of warranty ... but I can give you the number of a good plumber.'

CAIRO, EGYPT

How to find it: In the north of Egypt on the banks of the Nile, five hours' flight from London.

Vital stats: Population 18 million, rainfall 20 cm, literacy 71.4%, Arabic and English spoken.

The good: Pro-Western attitude, strong culture of customer service, thanks both to history and tourism. Cairo University is one of the biggest in Africa.

The bad: Soaring inflation, high pollution, aggressive drivers, random acts of terrorism and political violence.

Already there: Fujitsu, Orange.

Don't mention: Tutankhamun - cursed, apparently.

Translated: Please press 1 for sales, 2 for service and repairs, 3 if you're thinking of cancelling your subscription, 4 if you'd like to upgrade to a new service, 5 if you have an enquiry about your bill, or 6 if, by now, you've lost the will to live.'

HO CHI MINH CITY, VIETNAM

How to find it: On the Saigon river, two hours' flight from Hanoi.

Vital stats: Population 5,244,700, rainfall 180 cm, literacy 99%, Vietnamese, Chinese, English and French spoken.

The good: Large, young talent pool, low salaries and cost of living.

The bad: Lots of petty crime (eg, pickpocketing), noise and air pollution, limited public transport and appalling traffic. …

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