Captive Center

Nearly in every corner of the world today you can see captive centers operating round the clock. It seems that they are all over the place now. From South Asia to East Asia, captive centers continue to be the main preference of different top organizations in this day and age so as to effectively meet their sourcing needs.

Various international companies these days set up Captive Centers in countries like India and China in order to leverage the offshore advantage of these nations and pool in resources to work for them. If truth be told, captive centers are unable to get by without the parent company for operation and business.

In the same way, parent companies are helpless without these captive centers in view of the fact that they provide reasonably priced and time-effective services to the conglomerate. Without a doubt, captive centers are really the true extensions of the onshore teams of the parent companies.

Individuals and businesses nowadays opt for captive centers because it’s cheap to run and at the same time it lets the parent company to benefit from full intellectual rights and onshore buy-ins. It also guarantees proper control of offshore processes, resources, costs and technologies.

Global corporations that have long-term and larger resource requirements%3b companies that require intellectual property protection and need strong delivery processes can actually set up captive centers. Captives would be highly beneficial for organizations with a strong brand presence and larger market share.

When you come right down to it, the benefits of establishing a captive outsourcing center are having a greater level of control over operations of the outsource operations. In some cases, a business only needs to outsource a specific, routine task, which is not core to the companies operations. On the contrary, captive outsourcing centers are an excellent option for companies that want to establish an offshore delivery center for core business processes.

For instance, in this day and age, customer service is recognized as a core business area for leading ecommerce companies. Because the same products can easily be found for sale on other websites, these ecommerce companies today are using high level customer support to keep their customers happy.

It would be simple to find an offshore partner to outsource customer service too. In some cases, with a staff leasing partner company, new customer support representatives could even be available within an hours notice.

However, while the ecommerce company may value the cost advantage of an offshore partner, they may feel hesitant to turn over such a core area of their business to a 3rd party partner. This could be because of the very special way in which they perform customer service activities, or it might be because they would eventually like to even have ‘ownership’ of this offshore center.

Captive outsourcing relationships often involve the understanding of a ‘buy out’ clause. This entitles the captive outsourcing center to eventually be taken over fully, and owned by the purchasing company. This guards against the outsourcing provider from acting against the interests of their partner, and also lets the buyer feel they are making a long term investment – rather than simply outsourcing a service for a current need.