Captive Centers in Bangalore
Are captive centers in Bangalore dying? There is a significant increase in the IT industry in India these past years however, captive centers made by multinationals are slowly dying. What are the reasons for this? And what is another alternative other that captive off shoring in Bangalore?
We are aware that the primary reasons why multinationals opt to create their own captive centers in Bangalore are cost savings, quality improvement, and strategic reasons.
The two main motives to create captive centers would be to safeguard the company’s competence and/or of course a vision to transitioning the essential from tactical to strategic. The plan to go captive demands that you have sufficient size and scale that is sustainable in the long term, and in a way have the ability to compete with the outsourcing providers. Also, essential are the capability to integrate with the new outsourcing location in terms of setting up infrastructure, hiring staff, managing remotely etc.
However, even with these so called advantages, captive centres in Bangalore are failing due to the following reasons:
Lack of time
Lack of time is a major factor in the failing of captive centres in Bangalore and its relative to captive critical mass or CCM – Inexperienced managers and cross cultural issues could be significant factors for the failure of captive centers in Bangalore.
Issues concerning quality of work and production
This issue is about customer dissatisfaction due to security breaches, bad service etc
In the recent past, the Indian outsourcing industry has become extra efficient and their brand value sucks most good resources available in the market. Infrastructure cost is shooting up like anything in India and it appears quite unlikely that these rapid market dynamics featured in the original business plans which paved the way for captive centers in India. To give you a sense, the cost of commercial office space in Bangalore has quadrupled in 2002 – 2006.
Bad handling these kinds of events can be fatal to captive centres. Given the trend where in captive centers are failing, outsourcing partners need to think on how they can leverage this situation to their advantage.
