Pangea3 Using a Hub & Spoke Approach to Global Locations?

August 19, 2011

Pangea3’s recent opening of a delivery center in Carrollton, TX, near Dallas, highlights the speed with which the legal process outsourcing (LPO) industry is incorporating the general evolution of the BPO industry.  Initially, offshoring was exclusively to low cost countries to take advantage of labor arbitrage, and thereby, lower the overall costs of business processes. Since then, offshorers, both outsourcers and companies with captive centers, have begun implementing portfolios of offshoring locations using the so-called “hub and spoke” system.  “Hubs” of offshore work are generally located in scalable countries, like India and the Philippines, where there large numbers of low cost, skilled workers.  “Spokes” tend to be smaller centers that are used to meet particular skill, geographic, or regulatory needs.  Examples of spokes include the use of medium cost locations like Poland for European language skills or the location of a data center that can meet particular E.U. regulations; and Israel to get medium cost yet highly sophisticated legal skills.  (Sales offices, even when they house a few delivery people are not considered “centers,” and therefore not included in this analysis.) Read the rest of this entry »