EquaTerra believes upwards of 20 percent additional savings are on the table for some of India's captives, and that is on top of opportunities for improved quality and global process standardization.But still recommends rethinking the captive strategy, given the complexity of the processes that need to be kept in-house, and ways to leverage the maturity of the marketplace to augment staff, redeploy resources, automate processes, improve service quality and achieve significant additional savings.

There are several critical challenges facing today's captives, especially those in India:
1. While employee attrition is endemic to the industry as a whole, captives are at a disadvantage as they must pay significantly higher salaries and recruiting costs to compete for the same talent as big name IT and BPO firms.

2. India's captive centers are usually concentrated in a single geography where costs have likely escalated and qualified talent is harder to find, while service providers are dispersing processes to more geographically appropriate locations, e.g., Philippines or China.

3. Technology has improved and is driving cost reduction, but may not have made it onto the radar of the captive center's plans or budget.

4. The management attention required to drive ongoing process improvement and productivity has lost focus or is apathetic when compared to the energetic and competitive service provider community

Tags: captive - offshore - outsource - india - equaterra

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Prashanth Rai