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Managing Your Outsourced IT Services Provider: How to Unleash the Full Potential of Your Global Workforce by Venkatesh Upadrista

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CHAPTER 9

Captive Center Management

Captive centers (or captives) are delivery centers owned and operated by SROs, typically in nondomestic, low-cost locations, that provide service resources directly to their organization. The personnel in a captive facility are legal employees of the organization and not of their SPOs.

Going back a few decades, most large-scale and Fortune 500 companies decided to establish captives, especially for their IT development needs. This allowed them to take advantage of low-cost labor and to be less dependent on their IT SPOs. However, this strategy has not proven beneficial for all organizations, and some of them have sold or shut down their captive units. Some examples of captive unit sell-offs well known in the ...

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