Offshoring 'can help companies reduce outgoings'

UK based companies may want to consider making international money transfers and offshoring aspects of their organisation in order to reduce expenses.

David Ellis, partner at management consultancy OMC Partners, explained how businesses stand to gain considerably from moving some of their production abroad.

He claimed that finance and accounting organisations could see a payback in three years or less when they opt to offshore.

"In business, a three-year payback on a long-term investment is pretty good. The thing about this is that you get payback in year four, year five, et cetera. It just keeps going on," Mr Ellis commented.

It was suggested that employing workers in countries such as India, China or the Philippines can help reduce wage costs as labour is less expensive in these nations compared with the UK.

Making global payments could have a 25 to 30-year benefit as exchange rates and inflation would take this long to catch up with wage rates in London, individuals were advised.

"One other urban myth that we get a lot is that inflation in India or China or the Philippines is so raging that they will soon be as expensive as [the UK.] That's complete and utter nonsense," the expert stated.

As a result, Mr Ellis recommended offshoring as a good way to lower outgoings and boost profit margins.

His comments follow a recent announcement from Santander, which revealed it planned to return all its Indian call centres to the UK so that customers calling from Britain will be dealt with by an employee based in the country.

The move is understood to be in response to negative feedback from Brits who are unhappy that the company's service relies on an offshore call centre.

Santander is hoping to improve its customer satisfaction by removing the centres, which are often described as frustrating to deal with.

Posted by Thomas Smith

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