The first wave of offshore outsourcing was in computer programming, sending software development and maintenance abroad, mainly to India. The next wave, well underway, is shipping back-office business tasks overseas, like finance, payroll, claims processing, procurement and the like. That’s business process outsourcing, or BPO, in nerd talk.
Just how much of this back-office work can be sent abroad, how quickly, is a matter of some debate. These are chores that are semi-automated, a blend of technology and human skills. The labor-cost savings are still considerable — certainly on per-worker basis — despite a weak dollar and rising wages in nations like India. But these are also tasks, more so than programming, that often require knowledge of specific industries, business practices, even local cultures. The customer-service travails of Dell, which put a lot of its call-center work in India and later brought much of it back, is a cautionary example.
