Offshore centres of multinationals were considered unviable some years ago. But today they have not just outlived the prediction, but are also thriving
THE STRUGGLE
In April 2007, global technology research firm Forrester Research published a report that scared the bejeezus out of most multinational “captive centres” — company-owned offshore centres that provided services like software development, back office support and R&D to their parents. Titled “Shattering the Offshore Captive Centre Myth”, the report said that 60 percent of the 375 captives in India were struggling with a host of issues including cost escalations, skyrocketing employee attrition, lack of adequate processes and sporadic headquarters support. Most were therefore failing to meet their setup expectations and would have to pick one of four exit options: Shut down operations; sell out to third party outsourcing vendors like Infosys or Wipro; hollow out their operations and then “termite” it by filling it with vendor employees; or work in partnership with vendors.
(This story appears in the 02 July, 2010 issue of Forbes India. To visit our Archives, click here.)