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Choosing a global services destination is fraught with all kinds of challenges, not the least of which is finding good answers to basic questions. Sometimes differences in terms, data capture or culture make apples to apples comparisons more of an ideal than a reality.

Even comprehensive research reports may overlook an issue that could determine the success or failure of the sourcing initiative. Besides, you may believe that your requirements are unique — a mindset often ridiculed by the research community.

We, however, respect that attitude. Assuming, of course, that you’re not out to re-invent the wheel — especially when your goal is to cut cost. How and where do you start — especially if you’re new to sourcing or locating global services?

In a typical onshore outsourcing case, a decision on whether one should outsource a set of processes or run them in a shared-services center usually precedes the service provider selection process. In the global services scenario, the problem is that many of the functions in the overall sourcing process — such as whether to conduct a process in-house or outsource, choosing a provider and location — often fall off the sequence. And that impacts the time and energy needed to complete each of these functions, and not surprisingly the cart is sometimes in front of the horse.

A sure way to throw off the project timing is to decide midstream that the project should be conducted in a captive, company-owned facility that doesn’t yet exist — in a city to be named later. As you might expect, due diligence on location takes a lot more time in a captive scenario.

Country vs. City Approach

As a discipline, offshoring is maturing. In countries such as India, China and Russia — which are obviously enormous geographies with massive population — much more macro-economic information exists than micro — or city-centric — detail. A small Eastern European country is a different story altogether — there’s often much less information available, at least in English.

Here are some common parameters of location sourcing classified on the basis of whether they are primarily country-centric or city-centric:

		More or less same for all the cities in a country
•		Legal system
•		Business environment
		Moderately similar for cities within a country
•		Availability of raw manpower
•		Infrastructure quality
•		Risk
		Very distinct for cities within a country
•		Availability of skilled manpower
•		People costs
•		Real-estate costs
•		Maturity as an offshoring destination/ecosystem