Outsourcing is becoming increasingly popular, especially offshore outsourcing. Because there are so many benefits like lower cost, access to skilled professionals who specialize in specific tasks than on-site employees could do alone (and at greater speeds), ability to scale up/down business processes as needed without investing time & energy into creating more staff, etc. Some of the most common services that are outsourced are:
- IT-related functions
- Customer service/call center
- Web/software development
- Post-production services: photo and video editing
- Manufacturing
- Back office support, including data entry
- Finance and Accounting
The decision to go with a particular type of outsourced project will depend on the specific needs and requirements that you have. The three different options are nearshore, onshore and offshore outsourcing. Each offers unique benefits and drawbacks depending upon where your business operates in terms of proximity or accessibility concerns like time zones, etc.
Nearshore Outsourcing
Nearshore means contracting a company near your country, typically in the same time zone or close to it. The only real difference between nearshore and offshore outsourcing is how often you can visit them—with an outsourcing team on-site for quick response times whenever necessary, and communication becomes more manageable.
The proximity of nearshore companies to your home base offers the convenience and cost savings you would not get with an overseas firm. The rate at which they work may be more competitive than offshoring, but this is because it’s easier for them to find talent.
If we compare prices on both sides – nearshore and offshore outsourcing. Nearshore comes out ahead due mainly to its lower overhead costs while still providing high-quality services such as software development or customer support without sacrificing accuracy.
Onshore Outsourcing
Onshore means outsourcing to a company that is located in the same country. The onshore outsourcing market is a niche business that has been growing in popularity because it offers some significant advantages over traditional methods. Your company would be to find an offshore partner with similar goals and objectives, close enough so you can visit them regularly or hire temporary staff when needed without any travel costs involved. They also speak English which makes communication more effortless.
The downside to onshore outsourcing is that it often costs significantly more than nearshoring or offshoring outsourcing. However, their staff doesn’t have as many skills in certain areas, so they’ll need to spend time hiring someone who can do what you want them to during the period. This means there will likely still be some delay when starting work to complete projects smoothly.
Offshore Outsourcing
There are both significant benefits and disadvantages to offshore outsourcing.
The cost savings are one of the enormous benefits of offshoring your work. With most businesses always looking at ways to cut costs and increase their bottom line, this is what many companies turn to – they get access to skilled professionals for a fraction price without sacrificing quality.
The offshore outsourcing industry has a wide range of experts with various skill sets who can start your project immediately. You won’t be able to find this talent onshore, and it would cost you more money if they were located in the exact location where you work.
One of the significant drawbacks to offshore outsourcing is that there could be communication problems with people in different time zones and language barriers. Sometimes it’s challenging to schedule meetings when you’re in a 10+ hour difference versus an 8-hour one like locally.
The language barrier is one of many obstacles. The lack of English-speaking professionals will make it difficult for both parties involved if they do not speak this standard second dialect, which can lead to misunderstandings about what needs.
Famous companies who gained success with offshore development
Starting a business is by no means a straightforward task. It requires that you make smart, informed, and well-thought out decisions; otherwise, you are unlikely to be successful.
But considering the financial and talent-wise restrictions, it is exceedingly difficult for businesses to strike the perfect balance in business processes and effectual resource distribution unless an outsourcing approach is introduced as a part of the business. There are a lot of successful global companies that have successfully undertaken this alternative approach of outsourced development. Let us look at some popular and notable global businesses that have found success with an outsourced development strategy:
- Ford: Henry Ford was one of the first ones to understand that no company can be self-sufficient. The head of the automotive company wanted to control all stages of production personally but faced large costs that went into servicing all areas of the company’s activities. He turned for help to independent companies that took over part of the tasks. Now Ford produces only 30% of components independently, the rest of the production is outsourced.
- IKEA: Another giant that knows the benefits of outsourcing is IKEA. IKEA does not really have its own production, instead, it cooperates with 2500 suppliers whose quality has been proven over the years. The logistic functions at IKEA are also delegated to a third-party organization.
- Airplane repair and maintenance, baggage delivery, ticket booking, catering and many other functions in Virgin America are performed not by full-time employees, but by temporary employees of third-party companies.
- About 70,000 temporary employees test Google self-driving cars, draw up documents, improve company products, analyze data, and conduct marketing events.
Offshore outsourcing can be a great way to get your business’s help while keeping costs low. However, it’s essential to do your research and find a reputable company with experience in the field you need assistance in.
At Innovature BPO, we have over years of experience helping businesses like yours reach their online goals. Contact us today to learn more about our offshore outsourcing services and how we can help you take your business to new heights.
