New Body to Counter Offshoring Concerns

A new non-profit organization has been set up to educate research buyers and suppliers on the practice of offshoring, and establish offshoring disclosure standards for firms that deal with clients' customer survey or database information.

The Foundation for Transparency in Offshoring (FTO) has been founded by Tom Anderson - who is Managing Partner of the research consultancy Anderson Analytics. He says that the new body does not advocate for or against offshoring, but has instead been set up to bridge 'a serious transparency gap between research providers and clients'.

'Very few buyers have sufficient information to assess the relative strengths and risks associated with offshoring,' claims Anderson. 'In most cases, research buyers don't even know that their projects are being offshored.'

To illustrate this discrepancy, earlier this month, FTO fielded a study among 850 US and international research buyers and providers. When asked whether their organizations offshore research projects - compared with their research agency counterparts - nearly 20% more clients said no, 40% fewer clients said yes, and 100% more clients said they were not sure.

FTO defines offshoring as the movement of a business process conducted at a company in one country, to the same or another company in a different country, usually due to lower cost of operations in the new location.

Commonly referred to as knowledge process outsourcing (KPO), it is estimated that as many as two-thirds of research agencies now offshore services - from data collection to advanced analytics - to India, Eastern Europe, Latin America and Asia-Pacific regions.

FTO member Gordon Morris, who is Global Insights Manager for Sony Ericsson (London, UK) and serves on FTO's Board of Advisors, comments: 'Transparency in the research process is a crucial. We need to know exactly which companies our appointed agencies are offshoring to, where they operate, and what elements of our projects are being outsourced to them.'

To remedy the situation, FTO has introduced a self-certification process through which a research company can inventory its offshoring practices by activity, country, and provider relationship.

Participating research organizations receive one of two verification seals. The first certifies research organizations that offshore services and have complied with FTO disclosure standards; the second identifies research organizations that do not offshore.

In addition to Morris, FTO Advisory Board members include Sonia Baldia, a partner at Mayer Brown and a legal expert on offshoring and former ESOMAR VP Ann Margreth Hellberg. FTO is actively recruiting additional advisory board members, and has approached research industry professional associations to support the transparency initiative.

Web site: www.offshoringtransparency.org .

All articles 2006-23 written and edited by Mel Crowther and/or Nick Thomas, 2024- by Nick Thomas, unless otherwise stated.

• Anderson Analytics
• All news