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From Anywhere to Nowhere: Evaluating Offshore Destinations

Posted September 25, 2014

Established in 2004, A.T. Kearney’s Global Services Location Index™ (GSLI) offers a snapshot for business leaders looking to choose among a growing number of offshore locations, and the policymakers who seek to influence their decisions.
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The GSLI (formerly called the Offshore Location Attractiveness Index) analyzes and ranks the top 50 countries worldwide as the best destinations for providing outsourcing activities based on their “viability” in terms of financial attractiveness, people skills and availability, as well as the activities it can provide, from IT services and support to contact centres and back-office support.

The influential management consulting and strategic advisory firm describes the impetus behind offshoring as an essential matter of “cost arbitrage” which it views as having previously developed in three waves:

  • Offshoring itself, which consists of locating resources in low-cost countries, using centers owned and operated by the offshorer
  • Outsourcing, in which back-office operations are performed by specialized third parties under agreed contractual terms, which makes geography relatively indifferent to the company hiring the services
  • Automation, a wave that is still in its infancy, in which robots are programmed to perform routine tasks even less expensively than low-cost labour.

Kearney now sees all three “waves of arbitrage” as working in concert and through its latest GSLI findings seeks to examine their defining features, emerging trends, and implications for business executives and political leaders. In a message sure to provide little cheer to millions of potential North American workers, there is, the consulting firm asserts, “ample room for continued growth” in the offshore business industry.

In the 2014 GSLI ranking, India, China, and Malaysia remain the top three offshoring destinations, and Asia continues to dominate, with six of its countries among the top ten.

Click here to download the latest report.