Service Quality has Direct Influence on Nearshore vs. Offshore Decisions

By Jacob Cherian

Although low cost countries like India were favored destinations for outsourcing in the last decade, this trend is likely to change in the near future as the global economy heads toward recovery.

Most companies now say that nearshoring offers a better option than offshoring. Though this debate has been ongoing, efficiency and cost savings had tipped the scale toward offshoring in the past. However, evidence suggests that firms are bringing their call centers closer to home. Perhaps the single most important factor is that many customers are dissatisfied with offshore operations.

Experts say that it makes sense post recession to offer services closer to home. .

After the 2001 recession, it was profitable to transition jobs from America since it cost less/minute than doing the work at brick and mortar type centers within the U.S. Additionally, underdeveloped countries offered lower wages in exchange for top-notch skills.

Nonetheless, businesses are finding out that retaining clients has means a lot more than just cost savings. In fact, business leaders now say that customer service quality is essentially the road to profitability. As many firms rethink the option of offshoring, in the wake of a recovery, nearshoring is no longer the underdog since its proximity to onshore base centers offers more flexibility for businesses.

Reports say there have been many cases of dissatisfaction among supported services and a call for these services to be located closer to the U.S. offices. Some of offshoring that are of concern are cultural differences, where clients are unable to understand what employees are communicating. Sometimes customer dissatisfaction also has to do with employees lacking expertise in specific areas. These issues can be better addressed with nearshoring units that have a closer link to the U.S. For example, Delta Airlines, which has recently shifted its call center back home.

CEO Richard Anderson of Delta said was quoted as saying, “Delta Air Lines Inc. has stopped routing reservation calls to India, citing complaints from customers,” reports tmcnet.com.

Stephen Loyd, analyst at IDC, said in a comment that with the passage of the severe global recession has passed, homeshoring and nearshoring are likely to be better options than offshoring for businesses.

Jacob Cherian writes for SourcingLine a leading source of data on the top outsourcing countries and best offshore web developers.