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Offshoring or reshoring, that's the question

“But companies are becoming more cautious” explains Josefien Glaudemans, Managing Partner at BCI Global. “A number of companies who relocated their back office activities to Asia complain about bad communication, rapidly increasing wages, high turnover rates and lower customer satisfaction than expected.” A good example is Delta Airlines, which reshored 2,000 jobs back to the US from its Bangalore based call center that handles sales and reservations. Other examples of companies reshoring activities back to the US or Europe include AT&T, British Airways, JP Morgan, Santander and Dell. BCI Global has developed a new roadmap to define a robust future proof back office strategy. Offshoring is still an interesting alternative. Reshoring can lead to onshoring (lower cost locations in the same country) or nearshoring (lower cost options in the same geographic region). “For finance and admin functions we look for example at the strategic importance as well as the location dependency. Some activities are core and are handled often onshore like consolidation of balance sheets and tax planning. Order entry, accounts payable and receivable and general accounting activities are open to nearshoring or offshoring.”
A good example of onshoring is the strategy of Allen & Overy, one of the world’s largest law firms. Two months ago Allen & Overy opened in Belfast (United Kingdom) a new strategic services center for finance, IT, business services, HR and legal support. Half of the 300 new jobs are relocated from London. BCI Global evaluated more than twenty locations in Europe, North Africa and Asia (for more information click here). Wim Dejonghe, A&O’s Managing partner, indicated that Belfast was not chosen because of the low cost. “Than we would have gone to Asia. We did not want to compromise on our quality focus.”
There are plenty examples of nearshoring back office activities to particularly Central and Eastern Europe. SAP, Philips, Shell, IBM, NCR and many others have chosen that route. One of the latest is Tate & Lyle, a global provider of food ingredients and solutions. With the help of BCI Global, Tate & Lyle decided to open its new Global Shared Services Center in Lodz, Poland.

More information:

Josefien Glaudemans, phone +31 24 3790222, josefien.glaudemans@bciglobal.com

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