Is multishoring a new mantra?

What makes IT industry juggernaut TCS supplement its multiple city centres in India with new facilities in China, Uruguay and new locations in Central and Eastern Europe? Or what makes a smaller IT and BPO firm like Zensar articulate and adopt a multi-shore strategy with offsite onshore services from Slough in UK, nearshore faciities in Gdansk in Poland and offshore centers in China and India?

The simple answer could be to hedge our bets, protect future profits from spiralling Indian wages and send a political message to Western European countries petrified by the spectre of job losses. However all these are only peripheral because the reality is that it just makes sound business sense.

The cultural affinity that can be exploited partly by having local consultants in each country and language speaking Eastern and Central Europeans for studying complex processes prior to actual outsourcing is an asset that a three-shore model effectively exploits. As the Indian IT and BPO industry matures and clients trust us with not just their peripheral or "context" processes but also their mission critical or "core" processes and applications, the margin of error in understanding the customer is getting smaller with every new project.

Since the fall of the Iron Curtain, most of the Central and East European countries have seen economic stability and growth, and the insistence on English as well as German or French language education in many Central European countries such as Romania Poland, Hungary and the Czech Republic is a clear sign of their desire to emulate India's record, with our 17 per cent IT services in the total exports basket, only matched by Ireland with just under 20 per cent.

The costs too are not very different with a recent Deutsche Bank report suggesting that engineers in Bulgaria are actually cheaper than China and India while Romania is comparable and Poland, Hungary and Czech are not substantially more expensive, making it very viable for small centres with a focus on process and transaction outsourcing to come up as an effective complement to offshore applications development and maintenance centres.

So what does the future hold for the way work will be procured and transacted by visionary firms? Client needs will continue to be gathered onsite at their premises though the growth of modelling tools will probably help clients to convert their implied needs to models that can be shared on the Internet with their outsourcing partners. Much of the initial design will then be done interactively through offsite and near-shore consultants and once there is mutual agreement on what needs to be done, the process management or application development or support will be handled either by technology or remote workers who will be more invisible than today. Is that a perfect model and a recipe for doing away with the problems created by Bangalore traffic and SEZ brouhahas? Sure, if the offshore workforce can work from home - the true and final benefit of multishoring!