Industry Commentary

Nearshoring Capabilities are Crucial Across Demand Markets

By July 4, 2019January 10th, 2024No Comments

With so many enterprise contact center buyers uncertain about how best to manage customer experience, deciding between different business models can be a daunting task.  Today, the options for doing business can appear as confusing as they are risky. Organizations can keep work onshore. They can send it halfway across the planet. Or, perhaps, they can take on robots.  Labor market dynamics, stability and competitive pressures – all these factors help cloud good judgement.  It is in this vein that so many captive operators are keeping the nearshoring business model in mind as their own weapon of choice in BPO delivery.  The provider community itself needs to keep this dynamic in mind, with a focus on having a presence in the nearshore delivery destinations that are most relevant to their clients.

What is close is also likely to be familiar.  This cannot be underestimated in the world of contact center management, and it has been a major contributor to the expansion of nearshore locations that have exploded onto the BPO scene over the past decade. But, it is important to put this trend into the context of the current business environment.

Specifically, while many enterprise executives would prefer to work domestically in delivering customer experience management in many major demand markets, this simply is not an option. Record levels of unemployment in Europe, the USA and Canada have made sourcing talent a very costly prospect.  Equally, these same executives are mindful of their own narrowing tolerance for flying halfway around the world, considering the physical and mental toll of these trips.  And, while automated solutions are certainly making some headway into the domain of contact center interactions, there is a distance to travel before the majority of these interactions are likely to be wholly managed by machines.

This is why nearshoring continues to gain traction in the eyes of captive contact center buyers in North America and Western Europe.  This is validated in the 2019 Front Office BPO Omnibus Survey, in which nearly 500 respondents in key demand markets indicated an ongoing preference for contact center delivery from jurisdictions located within a 6-hour flight from their home market.  For example, among buyers in the UK, France and Germany, there is a noted preponderance for choosing delivery locations based in North Africa, Central Europe and Northern Ireland.  Equally, those in the USA and Canada showed a preference for many countries based in Central / South America and the Caribbean.  Key drivers for this ongoing interest in nearshoring are not new. Cultural familiarity, proximity, language skills and lower costs than those found domestically all contribute to this nearshore trend.  There are also location-specific drivers, such as the presence of modern facilities, commercially-friendly administrations, and improving infrastructure.

Still, providers should be emphatic on making certain their nearshore delivery presence is based in geographies that are relevant to their clients.  Far fewer enterprises are now willing to trade higher risk for cheaper costs. So, finding the requisite quality levels alongside stable operating environments can be a challenge.  Equally, ensuring a varied delivery platform within nearshore confines must also been seen as away of mitigating risk, as is looking to blend nearshoring alongside offshoring, work-at-home and automated solutions.  However, what is abundantly clear is that providers cannot avoid a solid nearshore presence. It is a vital offering for providers to  remain viable to their respective buyers.