India remains the destination of choice for most companies that have established GBS organizations or plan to do so. Hackett’s 2011 Business Services
Globalization research identified India as the number-one location for GBS centers: 74% of companies consider India to be a top potential destination for new
capacity, followed by China at 55%. Nevertheless, India’s overall share in total
business services capacity in low-cost destinations is expected to decline slightly,
from 39% in 2011 to 38% in 2013.
Combining anticipated growth by region with projections of business services jobs
moving into low-cost geographies between 2012 and 2016 reveals that India will
create fewer than 300,000 jobs from these traditional source of demand (Fig. 7).
(Note that this does not include any demand from technology services providers;
demand for business services outside of the areas of finance, HR, IT and procurement; or domestic demand.)
Projections of continued elimination of business services work in developed
economies will have major ramifications for developed and emerging economies
alike. First, companies need to plan for a reduction in the size of their business services organizations in developed markets. In Europe, there may be legal hurdles to
downsizing, while in the US, offshoring can be a public relations nightmare. Also,
employee engagement tends to suffer when there are questions about job security.
Companies need to rigorously adopt best practices for handling downsizings,
including clear and open communication and reliance on natural attrition to the
As the composition of the global labor force changes, strengthening talent management practices will be of paramount importance. Traditional talent management practices based on a top-down, command and control culture are ineffective
for managing a global service delivery organization. Talent management practices
must balance global process standards with local cultural differences.
Rest of world
Operations in emerging markets also must make preparations. There is an urgent
need to elevate the capabilities of staff to be able to function in a globally connected organization. This transition may involve transfer of senior executives into
these geographies, developing local leadership talent, and facilitating the adoption
of company cultures and values. India, which has the longest history of providing
business services in a global context, will be most affected by this transitionhttp://www.thehackettgroup.com/research ... recast.pdf