Rural sourcing--the practice of hiring service providers located in low-cost areas of the United States--is gaining traction. While it does not threaten to upend the major offshore providers in India any time soon, it is emerging as one more option in a comprehensive sourcing strategy, writes Max Staines, president for North America at Compass Management Consulting.

One of the potential benefits of rural sourcing is competitive pricing. The wages commanded by workers in rural areas can be as much as 40 percent lower than in major urban areas, Staines writes in a post at CIOUpdate. However, rural providers often have a lower level of investment, making them potentially less appealing for investment-intensive services like remote infrastructure support.

Keeping the work closer to home can also prevent time-zone, communication and cultural difficulties, Staines writes. Compass has found end users trying to fix their own problems when confronted with a provider with uncertain English skills, and this self-help approach can reduce productivity.

"Whether complaints about language ability or cultural differences are legitimate or not isn't the point. The fact that these attitudes can be shown to have a marked impact on operational performance cannot be ignored," Staines writes.

Where rural sourcing tends to fall short is in scalability, however. "Even the largest state universities in states like Arkansas, Kansas, Iowa, and Oklahoma can't produce the level of talent emerging from the technical academies of Bangalore and Beijing," Staines writes. Offshore providers also tend to be ahead when it comes to process discipline and maturity.

Staines asks whether a hybrid sourcing model may eventually emerge, combining the scale and skills of a large global provider with the market knowledge and personnel connections of a rural provider.

For more:
- see Max Staines's post at CIOUpdate

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