BPO clients advised to adopt multi-jurisdiction strategy to reduce geopolitical risk

BPO Clients Advised to Adopt Multi-Jurisdiction Strategy to Reduce Geopolitical Risk

Political and economic stability remains a key concern with regard to offshore outsourcing arrangements and must be reviewed on an ongoing basis in order to properly mitigate risks, according to Gartner. The warning comes as part of a new report – Mitigating the Offshore and Nearshore Service Delivery Location Risks Created by Geopolitical Instability – prepared by the Connecticut-headquartered research and advisory firm. Consequent to the publication of the research, Gartner said it had

discussed with its clients as to how best to address such concerns, with the options on offer including ceasing to source services from certain countries, relocating to a services provider in an alternative location or reshoring all such requirements. Taking an overview of the possible solutions, Jim Longwood, Gartner’s vice-president for research said that each option is expensive and likely to interrupt service delivery over the short to medium term. With this particular problem in mind, though, he did estimate that by 2023, some 65% of the world’s larger businesses that are reliant on offshore or nearshore service delivery centers will have switched to a multi-country sourcing strategy. Overall, the research firm advises organizations to implement proactive risk management when it comes to countering the problem of geopolitical tensions and to spread any risk across multiple jurisdictions while developing clear contingency plans. 

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