Among service models, multi-shoring can apply to either insourcing or outsourcing. Multi-shoring involves the selection of internal or external service providers in different countries, according to unique advantages.
Insourcing.
For insourcing with a multi-shoring plan for a particular class of services, the minimum configuration for a global services country appears to involve two or three business centers, in Europe, the Americas and Asia. A three-center multi-shoring strategy allows passing the baton for hot-site operations, redundant backup, disaster recovery and business continuity. Multi-shoring also permits the enterprise to define standards globally based on local, regional and international best practices.
Outsourcing.
For outsourcing, multi-shoring for a particular class of services involves a service provider (or multiple service providers) having service delivery centers in more than one country. Again, a three-center multi-continent approach has become the industry standard.
Risk-Management Strategies.
By adopting a multi-shoring strategy, the enterprise needs use the diversity of service centers as a strenght, not a weakness. Processes become standardized across continents, based on globalized software such as SAP, Oracle or (once upon a time) PeopleSoft. Political risk, arising from concentration of operations in only one country (such as India), is managed by selecting a second country that has many of the same advantages as the first country, but without the same political baggage.
Integration Risks.
The defensive strength of multi-shoring also brings the risk of a failed integration of diverse service centers. It is incumbent on the service provider to identify, manage and monitor this risk and do its utmost to avoid incompatibilities in processes across national borders. Thus, integration might fail where local regulations or public policy effectively defeats uniformity of processes, transparency of operations or other “syncopated rhythms.” As such local mandates evolve, processing may shift between countries to escape emerging burdens. The portability of such processing operations serves as a check upon the unfettered freedom of governments in the regulation of IT-enabled service providers and captive shared-services centers.
