Identify the attributes, benefits and risks for potential business process outsourcing (BPO) destinations: onshore, nearshore or farshore.

1. Onshore Nearshore Offshore
Wage Savings
5% to 20% possible 20% to 40% possible 30% to 70% possible
Real Estate Savings
Lower Moderate Higher
Skills Availability
Moderate, due to competition
for skilled workers
Moderate, due to competition
for skilled workers
Higher, due to large labor pool
with college/professional degrees
Implementation Speed
Higher, depending on project
scale
Higher, depending on project
scale
Moderate, depending on
project scale
Security and Business
Continuity
Higher: closer physical location
improves oversight
Moderate, due to distance
from current operations
Moderate, due to geopolitical
risks
Cultural Fit
Higher, due to similar
languages and time zones
Higher: language and cultural
differences easier to navigate
Lower: language, culture and
time zone barriers
Extended Workday
Lower: night shifts typically
less productive
Lower: similar time zones
don’t offer a shift advantage
Higher: “follow the sun” 24-
hour shift productivity
A comparison of key attributes of BPO site locations Higher Moderate Lower
Onshore, Nearshore, Offshore?
Location Analysis
Requirements for process visibility and tolerance for risk are some of the considerations for selecting an onshore, nearshore or
offshore business process outsourcing (BPO) model. This paper provides an overview of key attributes, benefits and risks for each
location, relative to the United States.
©2014DATAMARK, Inc. www.datamark.net
Onshore: Onshore outsourcing keeps
the process in the U.S. and uses U.S.-
based labor for the work. The location
can be on-site (at your facility); off-site,
but in your community; or off-site in a
community with a lower cost of living.
Nearshore: Nearshore outsourcing
locates the process in a country in the
same geographic region as the U.S.
Destinations include Canada and
Mexico, where shared borders make
it easy to transport documents for
daily processing.
Offshore: Offshore outsourcing
locates the process in a distant
country to benefit from lower labor
costs or tax savings, as well as
“follow-the-sun” work shifts,
allowing for 24-hour productivity.
India, the Philippines and China are
among the top BPO destinations.
Scale =
Choosing the Right Destination for Business Services
Source: Deloitte analysis; DATAMARK analysis

2. Location Analysis
Weighing Benefits and Risks
Benefits Risks
Onshore
•Cultural alignment
•Lower travel costs
•Lower management costs
•High quality assurance and oversight
•Ease of communication
•May be subject to stringent workplace regulations
Nearshore
•Lower travel costs than offshore
•Similar time zones
•Lower wages than onshore
•Language, time zone and cultural differences
•Holiday and staff scheduling differences
Offshore
•Lower wages than nearshore and onshore
•Allows for 24-hour workdays (“follow the
sun”)
•Extended workday increases productivity and
can reduce “time to market”
•Higher management costs
•Language, time zone and cultural differences
•Holiday and staff scheduling differences
•Possible wage inflation due to shifts in currency
valuation
•Geopolitical instability
©2014DATAMARK, Inc. www.datamark.net
Benefits and risks of BPO delivery locations
Recommendations
Selecting a location for your business process is just one of
many considerations along the path to a successful outsourcing
engagement.
It is important to have an unambiguous understanding of your
objectives and business requirements. Is your priority lower
costs, or is it improved quality and efficiency, or access to
resources and technology?
Often, organizations wish to blend and balance many
objectives, which can lead to a blend of outsourcing locations—
a strategy known as “global sourcing” or “right shoring.”
The decision to work with a provider of onshore, nearshore or
offshore business services should incorporate a rigorous
evaluation of the provider’s labor costs, process improvement
and automation expertise, industry knowledge, and a clear
insight of the benefits and risks associated with each
outsourcing location.
In addition to understanding the key attributes for each outsourcing model, your organization should consider the associated
benefits and risks involved with moving a business function to an onshore, nearshore or farshore location.
About DATAMARK
For more than 20 years, DATAMARK has
provided mailroom management, data entry,
document processing, business process
improvement consulting and other
outsourcing services for Fortune 500
companies across all industry sectors.
If you have questions or need assistance in
developing your organization’s case for
outsourcing and business process
improvement, DATAMARK’s business process
outsourcing specialists are available for a
complimentary initial consultation.
Contact us at:
www.datamark.net
Toll-free: 800.477.1944
Info: info@datamark.net