Captive Center
A captive center is generally defined as: An operation that is owned by an offshore company. The activities are performed offshore but are not outsourced to a third party. More »
Why do companies operate captive centers?
To cut down costs. The global recession has forced many companies to seek solutions to a decreasing influx of cash against a rising demand for products. The business model that was widely accepted more than 5 years ago was Captive Center Outsourcing. More »
A Closer Look at the SEO of Offshore Captive Centers
You may have heard of SEO, and what it generally means to online businesses. For offshore captive centers, however, SEO does not generally mean search engine optimization and online business promotion. For them, SEO refers to the three high level phases in establishing the business of a captive center. More »
The Trends of Captive Center Outsourcing
A survey made by Infosys on companies having outsourced captive centers states that an increasing number of Fortune 500 companies have started using captive centers as part of their business strategy in recent years. Many of these companies have even started utilizing captive centers as far back as more than 10 years ago when captive center outsourcing wasn’t that well known. More »
The Captive Center in Today’s Global Economy
Why do companies operate captive centers? The answer is simple: to cut down costs. The global recession has forced many companies to seek solutions to a decreasing influx of cash against a rising demand for products. The business model that was widely accepted more than 5 years ago was Captive Center Outsourcing. More »
Tips On Deciding To Offshore Or Outsource Operations
Businesses are made up of both benefits and risks, and offshoring outsource operations is not an exception. Caution is needed in acquiring outsourced services, and there is even a much greater risk in delving into offshore captive centers for your company. Before diving straight into action in getting offshored services, you might want to spend more time thinking on it again.
Choosing Between Setting Up an Offshore Captive Center and Outsourcing Services
Remember that there is a difference between setting up a captive center and acquiring outsourcing services. Having your own offshore captive center would require you to spend lots of time and money to build and set it up. This is also a strategy that is meant to be for long-term operations. If what you require, however, are services that will not be taking a long time to complete, such as creating a program or software for your company, then it is greatly recommended that you just get the services of an outsourcing personnel. There are pros and cons to both of these strategies. Be aware of them and think clearly which one will best serve your business.
Make Sure You Have Disaster-Recovery and Backup Plans
It’s always better to be safe than sorry. That’s why whenever you venture into something new in business, it’s always recommended to have a backup plan. Of course, there will still be risks in business. But if there is a chance that you can minimize mistakes and avoid any future disasters, then do so. Fortuitous and unstoppable events like natural disasters are also not unheard of to affect businesses when they happen. Storms, flooding, earthquakes and other natural calamities should be prepared for. This is especially true when your offshore captive center will be set up in the Asia-Pacific region where typhoons and natural disasters have been known to occur.
Tips On Setting Up and Managing Your Offshore Captive Center
So you and your company decided to put up an offshore captive center in another country. The research that led to this proposal (that led to its approval) would have told you that you will have to exert more effort and put in more time in order to properly manage you captive center. Here are a couple of tips that can help:
Be Patient In Setting Up Your Offshore Captive Center
With less costs and big savings as a purpose for companies to set up their own captive centers, it sometimes flies out of their minds that setting up a captive still needs sufficient resources (including financial resources) and time to be finally completed. One thing that every businessman should bear in mind always is that if you do not want to waste any more time and any more money on expanding your business, you better do it right. And in order to do it right, you shouldn’t hurry the processes in building your offshore captive center.
Participate Actively In the Negotiations
Legal counsel in the negotiations for your offshoring venture is important. But so is your participation as the owner and leader of the negotiations. As the leader in the offshoring project, it should be you who should lead the negotiations, and the lawyers and the advisory team should stand by as support. If you want your offshoring project to proceed as smoothly and as speedily as possible, it’s better to participate in the negotiations and the processes as much as possible.
Outsourcing Centers in Asian Countries
Asia has long been a favorite for destinations for offshoring and outsourcing centers. Among the many countries in the continent, four countries have made their mark in the business of offshore and outsourcing staffing.
India: India is in the lead when it comes to offshore services and outsourcing centers in Asia. The country has established itself strong in both IT and non-IT outsourcing areas, and also has an attractive rate in scale and cost of labor. It has a very large pool of labor and manpower, and the employees are trained to meet the demands of a market bent on technology and telecommunications. Foreign investors looking to set up an outsourcing center in India will only have to expect infrastructure problems and inadequate local and international connectivity. There is also the issue of privacy and security laws, as India lacks breach notification requirements and privacy legislation that equal that of the laws of U.S.
China: China is not likely be left out in this business of outsourcing centers. The country is proving to be competitive, too. Its labor size and costs is competitive relative to other offshoring destinations. There is the problem of language barriers, however, and sometimes investors have to pay a premium to get hold of personnel with English-language capabilities. There is a lack of English fluency in the country that makes it difficult for Americans to conduct their business. Other problems that foreigners have to contend with in setting up outsourcing centers in China are the country’s copyright laws and intellectual property rights regarding IT software, and the inner-country competition (wherein you cannot trust what one province has to say about another province because most probably they are just badmouthing each other).
SEO of Offshore Captive Centers, Part 2: E for Establish
After we have discussed the first phase in building your company’s offshore captive center, we will now go over the elements to be considered in the second phase of the SEO for offshore captive centers. In this next level, the strategies and plans you made out in the beginning will be put into action.
E is for “Establish,” and this is the next phase in the SEO of building your offshore captive center. In this phase, your company’s strategy from the first phase is put into fruition. Proper channels and regulations should be recognized in this plan of action. With your captive center strategy laid out, it’s time to make your plans and operations more detailed and clearer.
Assign roles and responsibilities in the management of the operations. The team for the project should employ good governance and stick to regulations for the center. With the organizational responsibilities established, there can be a solid chain of command for the operations and processes. This will allow for the smooth flow of directions and procedures. It will also minimize any mistakes or miscalculations on the project.
With the management structure in place, it’s time to go down the organizational chart and take care of other details such as the infrastructure and staffing of the offshore captive center. With the infrastructure, make a detailed plan for office space. Don’t forget to consider sufficient office space, workstations, conference rooms, etc. You may also want to think about where to put the rest rooms, and maybe also a pantry for the employees.
SEO of Offshore Captive Centers, Part 1: S For Strategize
Business models of offshore captive centers have their own SEO when venturing into this line of business. This process is practically the basis of companies when they set up their own offshore centers on foreign countries like India and the Philippines (two of the leading Asian countries when it comes to outsourcing and offshore staffing). SEO means “Strategize, Establish, and Operate.” In this article, we will discuss the first phase of SEO, which is to strategize when starting your offshore captive center.
In making your strategy for putting up your company’s offshore business, you first have to consider if this plan is the best move for your company. There are companies that have not turned to offshore businesses because they thought that it would not be a feasible move on their part. Make it a point to go over the pros and cons of putting up an offshore staff before you venture out or your own offshore captive center. When you do make the decision, then the first step you have to make is to plan out and strategize.
Part of the strategy in setting up your company’s offshore captive center is selecting the right country and city for the operations. India is one of the top countries for offshore businesses, but other Asian countries, most especially the Philippines, is also gaining a reputation in this industry. In choosing a location, it would be wise to study the country’s economic growth (especially pertaining to the telecommunications industry) and the resources available to the company (especially the manpower and competence of the offshore staff).
