H. Narayana Swamy
Partner and Director, CaptiveAide
When the economy hit a low a few years ago in the US, some analysts predicted the demise of the offshore captive centers. The reasons they furbished were: falling salaries in the US because companies were downsizing, availability of talent because companies were downsizing, increasing costs in India because salaries were rising, scarcity of talent because too many companies were hiring.
It’s been a few years since that prediction, and no, it didn’t come true.
On the contrary, the number of captives has gone up and so has the quality of work being done in India.Research firm Everest Group found (in mid 2014) that Global In-house Centres (another name for Captives) deliver 30 to 70% savings. While 70% may be a rare statistic, savings are a reality. And will remain so for at least the next decade.
Having been around for over two decades now, the art of setting up an offshore captive center is well documented and the setting up can be done by experts in the shortest possible time. These experts have previously headed captives themselves or set up a series of them. What to do, and what not to do, is now in their DNA. They have a network of people they can tap at short notice, and an ecosystem that will deliver goods and services practically off-the-shelf. Hence, new captive centers will be set up far more quickly in the near future than ever before. I don’t have to tell you this: if you save time, you generally end up saving money.
In about five years, we will see the emergence of several smart cities in India and there’s no question that they will all be IT friendly and IT dependent. They will be young and vibrant, attracting talent from all across the country to work and live there. Those with captives already in India will find this a great opportunity to extend their scope and reach by either moving to a new location or setting up one more captive unit. Those looking to arrive for the first time will have far more choices of location than they do today.
Cloud, it’s clear
Companies are relying on cloud technology to store data, whether it is in the form of voice, video, audio, images, making it as dense as data centers once used to be. Since this virtual world can be managed, operated and accessed from anywhere, offshore captive centers in this sector will thrive.