'Mix-and-match' drives offshore cost savings

A mix of low-cost nearshore and offshore locations is the best way to drive maximum profit from outsourcing call centre work, according to a new report.

The Datamonitor report The Future of Outsourcing says that domestic call centre outsourcing in Western countries such as the UK and US is slowing as companies increasingly look to cheaper offshore options.

Companies following this so-called "best-shoring" practice match specific customer care needs to the particular offshore location that is best suited to service those functions.

This means, for example, that many companies are now locating the lower-end administrative-level customer care in more distant offshore locations such as India and the Philippines, while moving the high-end and value-add work to closer nearshore countries such as the Czech Republic or Egypt.

The report said: "It allows the investor to save on the cost of domestically sourcing the work, while at the same time removing the inflexibility of using only one offshore location."

Business process outsourcing is also continuing to grow and the report claims the most successful approach is for companies to streamline their systems and processes before moving the service offshore.

Datamonitor said Centrica is one company that has taken this approach of outsourcing a single customer accounts entity to India rather than a number of disparate systems and that as a result its cost of servicing each customer will fall from £30.74 to £21.86.