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Introduction

The captive model may have temporarily fallen out of fashion, but it is now re-emerging as a key element of many firms’ sourcing strategy. This report gives an overview of the development of captives, and looks at how they have continued to evolve, both in terms of the services being delivered and their geographic reach.

Highlights

  • Having gained widespread acceptance in the late 1990s, the popularity of offshore captive centers peaked between 2003 and 2005. That popularity began to wane in 2006, and a spate of divestments in 2008 and 2009 was a clear sign that the captive model had fallen out of favor with large enterprises.
  • A resurgence of interest began in 2013, led by major multinationals such as BT and AstraZeneca. The captive model has continued to evolve, and centers are now offering more complex services. In addition, companies are increasingly operating captives in multiple locations.

Features and Benefits

  • Analyzes recent trends in the use of captive centers by enterprises.
  • Evaluates the development of the captive model, both in terms of the services being provided and the geographies being targeted.

Key questions answered

  • What is driving the recent resurgence of interest in the captive model?
  • How are enterprises fitting captives into their broader sourcing strategy?

Table of contents

Summary

  • Catalyst
  • Ovum view
  • Key messages

Recommendations

  • Recommendations for enterprises
  • Recommendations for vendors

The rise and fall of the offshore captive

  • Captives gained widespread acceptance in the late 1990s
  • Spate of sell-offs was a sign of the captive’s waning appeal

After a lull, captives are returning to prominence

  • Offshore captives were seen as unfashionable by 2010
  • The captive model has continued to evolve
  • Increased complexity creates major new challenges

Appendix

  • Methodology
  • Further reading
  • Author

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