In my own experience this is a great move. On site delivery model is great and it improves efficiency of the services. It gives the service industry to move up the value chain. The key advantages of this model are -
1. Close to the end customer
2. Teams can be benchmarked for efficiency and satisfaction across the locations and each one gets benefit from the other as a result of healthy competition. On-site team is sensitive to higher "expenses" and off-site team is sensitive to "high-efficiency". This brings the best of both worlds.
3. Win local services business and participate in the revival of economy, instead of fighting at WTO for more H1 visas.
Most of the global corporations had moved to "captive" development centers to take advantage of best of both worlds and drive common practices. The service companies can now go after the captive centers.
The focus will eventually shift from arbitrage opportunities to creating assets in the countries which offers fewerbarriers and provides better business environment. The service delivery model will face its test for operating efficiently and growing business. It is ironic that in yesteryears bench-strength was critical to win business and attrition was a problem. Now the bench-strength bites and healthy attrition is welcome!!
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