For decades, offshore outsourcing has been a worldwide solution for businesses. It helps various industries and business sizes to efficiently meet their goals, optimize their products and services, and grow exponentially.
But what exactly is offshore outsourcing, and how does it help businesses like yours? In this article, we’ll shed a light on those questions, and help you decide if you should adopt this strategy.
When running a business, you need to spend a lot of time, effort, and resources on different functions, systems, equipment, and processes. That’s not even counting labor and staffing expenses yet, which can take up as much as 70% of your total business expenses. But with offshore outsourcing, you won’t need to mind all of those on your own.
To define offshore outsourcing, we first need to establish what outsourcing is. Outsourcing happens when an organization hires a third-party service provider to perform certain business processes. When you outsource an offshore team, it means that your service provider, as well as your team, is located overseas, where labor costs with the same levels of expertise are lower, like the Philippines or Colombia.
Offshore outsourcing is not only done by companies to save operating costs. It also allows them to boost their speed to market, service quality, and efficiency. Manufacturing and call center operations are commonly outsourced offshore. But nowadays, more and more companies do this for a wide array of functions, such as IT services, digital marketing and software development, data entry, graphic design, and even HR operations.
When looking for an outsourcing partner, there are three types of locations to choose from, namely onshore, nearshore, and offshore. But which one is best for your business? To help you decide, we’ll delve into their perks and disadvantages.
Onshore outsourcing is also known as local outsourcing. Here, your service provider is located in the same country as your business.
The benefits of onshoring are:
However, these are its disadvantages:
Nearshore outsourcing is somewhat of a midpoint between onshore and offshore outsourcing. A nearshore service provider is located in a nearby country, perhaps one that borders your own.
Its benefits are:
However, nearshoring still costs more than offshore outsourcing.
When it comes to reducing costs, offshore outsourcing is your best bet. There would be time, language, and cultural gaps, but a seamless offshore operation is definitely achievable. Plus, there are plenty of ways to engage and motivate your outsourced team, even if they are on the other side of the globe.
It has other pros and cons, as well, but we’ll delve deeper into those later.
Offshore outsourcing is an option for almost every aspect of your business. But for the most part, these services fall into three types, which are:
Production offshoring is also known as Business Process Outsourcing (BPO). Here, you are relocating physical business processes overseas. It includes a wide array of functions, including product manufacturing, and front-office and back-office solutions.
Front-office solutions are the customer-facing aspects of your business. Such services include but are not limited to:
On the other hand, back-office solutions belong to the side of your business that the customers don’t see. And most of these solutions are concerned with the internal functions of your business. You can outsource back-office services like:
This type of offshore outsourcing focuses on ai augmented operations and software development services. Asia is the hotspot for innovation and software offshoring, as many Asian countries (e.g. Japan, China, India, and the Philippines) are known for inexpensive and cutting-edge technology. So, a lot of companies are tapping into these tech outsourcing destinations.
The biggest tech companies in the world, especially those in Silicon Valley, are known to utilize this outsourcing solution. And many territories outside of Asia are becoming ai innovation and software offshoring hubs, as well.
IT systems are now integral in business, and you need to take care of these systems to function properly. This is where IT system services offshoring comes in.
Here, your IT systems are taken care of by a dedicated team of experts. The team is in charge of the system’s optimization, maintenance, repair, and support services. This ensures that your operations always run smoothly, and you can provide the best services to your customers.
Offshore outsourcing offers many advantages. It helps businesses save up to 70% on their operating costs and gain a competitive advantage in their respective industries. However, it can also bring some challenges as a result of differences in time zones, culture, and foreign regulations. But are these cons enough to outweigh the pros? Let’s find out.
With the right outsourcing partner, you can avoid the negative effects of outsourcing. At the same time, you can also maximize its benefits. To do this, you need to:
Are you considering offshore outsourcing for your business? Booth is here to help. We are an outsourcing service provider in the Philippines that offers Staff Leasing and Managed Services for a wide range of businesses processes.
When you partner with us, we ensure that you retain control over your outsourced staff. We will work with you closely every step of the way, so we can guarantee that your team is always optimized, and can deliver the best results for your business.
Contact us now, and start your offshoring journey with us!