Offshore outsourcing-The unspeakable taboo

Andrew Milroy

I recently participated in a contact centre industry event in Sydney. Predictably, many of the vendors that sponsored and presented at the event were promoting offshore contact centre services.

The sales messages, as always, were very compelling. Offshore contact centre destinations such as the Philippines offer many benefits above and beyond lowering costs. The availability of skilled staff who are willing to work as contact centre agents is much greater than in mature economies.

However, what was most interesting to me was the unwillingness of delegates to openly talk about the benefits of sourcing contact centre services from offshore locations. Talking positively about offshore outsourcing has now become taboo. Companies that purchase these services prefer not to discuss them at all. Financial services organisations, in particular, seem terrified of negative stories appearing in the press about them 'sending local jobs overseas' and creating unemployment in their home markets. Worse still, they fear being forced to justify their business decisions to politicians that take a steadily growing interest in their operational activities.

Indeed, offshore outsourcing has become a major political issue. The most commonly articulated views on this matter are negative. Few politicians will argue publicly in favour of sourcing services from offshore destinations. Only the business press writes about any of the benefits of offshoring.

To me, the success of the offshore outsourcing market is one of the few obvious benefits that globalisation delivers to ordinary people. It creates jobs and business in parts of the world that have, hitherto, been starved of investment and opportunities. It also enables poorer countries to sell services to rich countries. Today, Australia sells a lot more to India than India does to Australia. So, it doesn't seem right that people should complain about the balance of trade becoming more even as Australian companies buy more services from India. We cannot continue to live in a world where a few countries hoard most of the wealth and create international trading environments that reinforce global inequalities.

Indeed, large businesses in Western countries prefer not to discuss the massive benefits that offshoring is offering to communities in poorer countries. They seem to be unwilling to stand their ground on this issue. In the case of offshoring, it is one of the few areas in which financial services organisations can claim to be on the moral high ground.

An interesting paradox has emerged in Western countries. It is often argued that workers in the banking sector must continue to receive very large bonus payments or their jobs will go offshore. At the same time, it is also argued, often by the same people, that costs associated with employing ordinary workers must be lowered, or their jobs will go offshore. Many of those in the financial services sector are happy to publicly justify sky high bonuses that clearly demonstrate market failure to any student of economics. On the other hand, they are much less likely to publicly justify an activity in which the market is working to the benefit of ordinary people, namely the provision of services from poorer countries.

Andrew Milroy is vice president, ICT practice, Frost & Sullivan Asia Pacific