Global sourcing industry sees surge in onshore locations

Dive Brief:

  • More outsourcing companies are locating new operations onshore in the countries where they deliver services rather than outside of them, according to Everest Group, CIO reports

  • During 2015 and the first half of 2016, the percentage of new onshore efforts grew to 52% versus offshore delivery locations among the top 20 service providers. In 2014, onshore efforts were at just 45%. The current 52% represents the highest percentage of onshore locations ever among those service providers.

  • IBM, Accenture, Xerox, Dell, Infosys, Wipro, HCL, Walmart, Siemens, Bosch and Mazda are among the companies that have set up onshore centers in the last 18 months, according to CIO.

Dive Insight:

Outsourcing firms may be feeling pressure from a number of changing factors and regulations. In some cases, the service providers are now required to obtain a certain percentage of talent from within the outsourcing country. In other cases, they are required to maintain data onshore.

Onshoring may also help ease client coordination. Experts say digital transformation efforts are more easily achieved in close proximity to the client’s homebase, unlike services delivered in the past where location was less important.

In the U.S., companies are likely to feel additional pressure as President-elect Donald Trump takes office and pushes U.S. companies to reduce offshore outsourcing altogether.

Filed Under: IT Strategy
Top image credit: Kenneth Lu