When Fortune 500 companies like Citigroup, Dell, Unilever closed their captive centers, the offshoring industry feared that it may sound the death knell for captive centers. However, captive activity reached a 2-year high in the fourth quarter of 2009, with the last 5 quarters recording increased activity for captive centers.
According to Ilan Oshri, author of the forthcoming book, “Offshoring Strategies: Evolving Captive Center Models” – February 2011, MIT Press – Captive centers is just one sourcing model from the many sourcing models available nowadays. It has its advantages and disadvantages, and there will always be big companies that find this model perfect for their needs. But to succeed in this sourcing model, big companies need to scale up, have efficient governing structures, and maintain low attrition levels. Moreover, outsourced markets like India have already reached such high levels of maturity in terms of IP security, IT infrastructure, Innovative R&D, and high-end Project Management that it no longer makes rational business sense for companies to set up their own captive centers.
How can small and medium size companies take advantage of this sourcing model? When asked this question, Ilan is quite clear. “I cannot see the logic for such firms to set up their own captives. There isn’t enough scale. They have to explore ways to use existing captive facilities.”
This is where Suyati’s Dedicated global Team (DGT) approach to sourcing can help. DGT combines the exclusive and dedicated nature of a captive center, and the low-risk, low-investment, quick-turn-around nature of the outsourcing team. The DGT model works with SME businesses to understand their needs, identify areas to be outsourced, hire the dedicated team which will work directly with the SME’s IT team out of Suyati’s world-class facilities, manage the legal and administrative functions, and deliver as per schedule, on time. On top of it, Suyati’s DGT has a clear and transparent cost structure that removes hidden costs, and “shocking invoices”!
Would like to know more about Suyati’s DGT model? Our team is in Germany from March 1st until the 10th, and can meet with you at your convenience. If you want additional information, or our free e-book on “IT challenges faced by Germany, and how Suyati’s DGT can overcome those challenges”, email our Manager – International Business, Ramanan Ramamurthy at firstname.lastname@example.org.
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