Dive Brief:
- Many mid-size U.S. cities and other areas now make attractive alternatives to India and other offshore locations for companies considering consolidating finance, IT, and other business services operations for shared service or global business services centers, according to new research from The Hackett Group, Inc.
- A diminishing labor cost gap combined with factors such as lower turnover rates, greater business knowledge, proximity to customers and headquarters, and state tax incentives has created conditions where many companies are now seriously considering U.S. locations, particularly for centers handling complex and higher-value processes.
- Top 10 cities in the research are: Syracuse, NY; Jacksonville, FL; Tampa, FL; Lansing, MI; Grand Rapids, MI; Atlanta, GA; Allentown, PA; Green Bay, WI; Richmond, VA; and Longmont, CO.
Dive Insight:
According to Jim O'Connor, The Hackett Group Principal and Global Finance Executive Advisory Practice Leader, companies are realizing that the U.S. is becoming an increasingly viable option for elements of their service delivery organization, and "we're seeing real growth in this sector, with nearly 700 U.S. centers of excellence, shared service centers, and global business services operations now up and running."
O'Connor added that while labor and operating costs are still high in the U.S. compared to Eastern Europe, Latin America, and Asia, the gap is shrinking, and there are significant other benefits. In more and more cases, those benefits outweigh the additional cost. In addition, the public response to offshoring has made keeping jobs 'at home' a attractive option for U.S. companies.
