Infrastructure

In India with redundant telecom and utility infrastructure, there is very good reliability within India's special IT parks. Reliability can be spotty outside the parks or in more remote areas. In Philippines IT parks that have sprung up over the past 13 years fuel the export industry. Abandoned U.S. military bases left behind dependable telecom infrastructure. In Russia Infrastructure quality and quantity nosedives when outside of Russia's few IT parks. In China Infrastructure can be spotty outside major cities, but China is building networks, particularly telecommunications, almost as fast as the U.S.

In Canada Solid telecom infrastructure. In mexico Solid inside the technology parks In Ireland Solid. The infrastructure required to transmit the work material to the offshore site must be designed to achieve sufficient scale. In some cases, the required scale can be significant. For example, imaging centers only become economical when designed for high volumes with 24 hour operations. However, the transportation cost of paper (both time and money) to an imaging center can also be significant.

In this situation, outsourcing suppliers must be able to create regional imaging centers that achieve the required scale. In many cases offshore efforts require that the outsourcing supplier develop an entire "community" within a country. These sites typically employ thousands of resources (people), thereby requiring large scale recruiting and training efforts (and sometimes even housing). The facilities must also be operationally robust, often requiring redundant power systems, satellite up-links for data transmission, and large-scale computer systems.

Over time outsourcing suppliers are developing the ability to move work between different offshore sites. The potential for short-term disruptions or longer-term changes in the labor market necessitate that work become "portable" across sites. This places another burden of scale on suppliers and their ability to quickly and cost-effectively rebalance work across different geographic regions. Labor arbitrage is playing a significant role in accelerating the pace of BPO. However, buyers and suppliers must not forget that labor arbitrage is only part of leverage equation for successful outsourcing relationships. When labor arbitrage utilizes best practice processes designed around appropriate technologies and is executed at scale, the power of the solution can be tremendous.