Labor arbitrage and shared services companies have had a perfect marriage over the last 20 years. Then along came the Digital Revolution with new business models and a new construct for services. One component of the digital model construct is DevOps. It makes a significant impact on business services, but it’s important to understand how it changes the picture for labor arbitrage and shared services.
Shared service companies are structured on a functional basis. One way to think about them is they are a stack of functional expertise. In the case of IT, the stack includes such functions as infrastructure, security, application development and maintenance, and compliance. There is a multiple stack hierarchy, with each functional layer having shared service champions responsible for delivering that function cost-effectively at a high level of quality. Labor arbitrage fits perfectly into this equation in that each functional layer uses people, and the work can often be done more cost-effectively offshore than onshore.