Citigroup is all set to move out from it’s captive BPO unit, Citigroup Global Services (earlier known as eServe International), which has almost 8,000 people spread over two centres in Mumbai and Chennai.

 

There is an emerging trend which shows that companies are slowly becoming averse to running captive units, mainly because they are no longer interested in managing the nitty-gritty of daily operations on a large scale.

 

According to a report by Sudin Apte, Country Head and Senior Analyst, India Operations at Forrester Research:

As a result of the lack of management support, spiraling costs, skyrocketing attrition, and a lack of integration, more than 60% of the captive centers in India alone are struggling. Based on how they score on Forrester’s 10-question captive center self-test, firms have four captive exit options ranging from simply shutting down and going home to selling out to a third party.

Many of the parent companies may now decide to look towards a third party service provider to cater to their requirements. There are precedents to Citi’s move, namely WNS Holdings (2002), GE Capital (2004), and HCL Technologies (2005).

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