Global Location Insights: April 2012 - Rural Sourcing - An Emerging Alternative for Traditional Outsourcing?

11 Apr 2012


Market Vista

Topic: Rural Sourcing – An Emerging Alternative for Traditional Outsourcing?

Rural sourcing is emerging as an area of interest among buyers and service providers, given its appeal as a potential alternative to conventional outsourcing/offshoring models. Most discussions on this sourcing model remain focused on niche service providers that have emerged in this space, especially in the United States and India. Rural sourcing is, however, still at a nascent stage and its value proposition remains to be proven.

Our research brief intends to demystify this phenomenon in the two geographies where it is gaining most traction – the United States and India. In this research, we investigate the drivers behind rural sourcing, the current state of this nascent market, and its potential as a viable outsourcing model.

Blended annual operating cost per FTE for IT-ADM 

The value proposition for rural sourcing differs in the United States and India. In the United States, the value proposition is closely related to achieving cost savings while retaining work onshore. In India, however, the value proposition is somewhat different, as rural sourcing so far is viewed primarily as a means for community transformation and development. Most rural sourcing firms focus extensively on the social aspect of the phenomenon and use it as a means to develop the rural communities through job creation.

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