BPO services sector. Many multinational companies prefer setting up offshore IT services and business services subsidiaries once again post all the trauma of recession. Mainly companies want to tap talent in low-cost locations. The subsidiaries popularly known as the captive centers in the outsourcing industry because they meet the in-house services requirements of companies. This can be back office outsourcing or even the core services outsourcing.
According to report, the focus of these centers has shifted from mere cost-cutting to innovative development and building deep business expertise which local outsourcers are not always able to provide. Recent trend suggests that companies prefer a hybrid model for offshoring that combines captive centers with outsourcing to local service providers. The BPO service providers continue to be a key element of the global sourcing strategy of organizations. In Asia alone around 62 new captive centers were set up and many were expanded.
The setting up of new captive centers, and expansion of existing ones, will happen in multiple markets and will often be driven by the opportunity for companies to push their products and services in those markets. Experts opined that captive center has the skills in-house to hire staff, and knowledge of the market it operates it, making it more suitable for launching domestic sales operations. Also Offshore BPO service providers tend to do work for a number of customers in the same industry, such as financial services, insurance services etc.