Reducing costs through outsourcing and offshoring

Cost differentials and the economic environment are resulting in companies reviewing polices on the use of offshore labour to deliver Customer Front Office and Back office services. Offshore and onshore service options from India, the Philippines, South Africa and other countries that offer customer service unit cost at around a third of UK costs.

Outsourcing and offshoring programmes pose risks to customer experience, quality and employees (e.g. TUPE). Transition is a key area of risk, where productivity may be impacted during periods of uncertainty and transition, requiring specific mitigation.

Outsourcing and offshoring can deliver immense benefit. However deals can be at least as risky as integrating an acquisition, and it is essential to manage these risks with the full suite of tools available - contractual mechanisms, programme disciplines, people selection etc.