For decades, choosing a BPO meant choosing a place. Offshore for the lowest cost, onshore for the closest cultural fit, nearshore for a compromise between the two. The whole industry organized itself around geography, and buyers were trained to think the location was the decision. That framing is now out of date, and the vendors still selling it are selling the past.
The term making the rounds is smartshoring. It is worth understanding, and worth contesting, because the idea behind it is right even if the label has been claimed by the large providers.
The old debate is out of date
The offshore-versus-onshore choice was really a set of tradeoffs: cost against proximity, price against language and cultural alignment, savings against time-zone overlap. Those tradeoffs were real when every contact required a person in a chair somewhere. Once software can resolve a large share of contacts regardless of where anyone sits, the geography of the human team stops being the primary lever it used to be. AI-first support changes what the location debate is even about.
What smartshoring means
Smartshoring, stripped of the marketing, means matching each piece of work to the right model rather than sending everything to one place to chase a single number. Some work suits automation. Some needs people close to the customer's market. Some can sit anywhere. The insight is that you no longer pick one location and route all your volume through it. You route by what the work actually needs.
Location matters less when automation carries the routine
Here is the shift that undercuts the old debate. When automation handles the routine majority of contacts, the human team you keep is smaller and focused on the complex, high-value work, and for that work, proximity and skill matter more than raw labor cost. So the question stops being where can I put the most agents for the least money and becomes where and how do I place the smaller expert team that handles what automation cannot. The cost argument that made offshoring the default loses most of its force.
How to think about it now
Ask a prospective partner how they decide what gets automated, what gets handled by people, and where those people sit and why. A vendor still leading with a single low-cost location is answering a question that mattered more a decade ago. A partner thinking in terms of matching work to model is answering the one that matters now.
Frequently asked questions
What is smartshoring?
Smartshoring means matching each type of work to the right delivery model and location rather than routing all volume to a single place to chase the lowest labor cost. It reflects the fact that different work has different needs.
Is offshoring still relevant with AI-first support?
Less than it was. When automation resolves the routine majority of contacts, the smaller human team that remains handles complex work where skill and proximity matter more than raw labor cost, so the cost case that made offshoring the default weakens.
How do I evaluate a BPO's location strategy?
Ask how they decide what gets automated, what people handle, and where those people sit and why. A partner matching work to model is addressing today's question, while one leading with a single low-cost location is answering an older one.