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Our Blog

16
Oct

An Overview to Offshore Outsourcing

Offshoring vs. Outsourcing

Just like outsourcing, offshoring is also a business strategy, which has been widely used by many businesses today. Oftentimes, offshoring and outsourcing are used synonymously or interchangeably. Although these two strategies are somehow the same in terms of their practice, still, they are different entities.

As defined in the dictionary.com, outsourcing is “to purchase or subcontract from an outside supplier or source,” while offshoring is “the practice of moving a company’s operating base to a foreign country where labor costs are cheaper.”

In short, outsourcing is the use of outside resources, such as third-party contractors, to get products that are not available within the company’s premise or to hire services that cannot be performed by in-house staff. A typical example of this is getting the services of a local web development company to attend the website needs of a local business.

On the other hand, the strategy, in which a particular business operation is moved from one country to another country, is called offshoring. Putting-up your own customer service center to a low-wage country is one of the most common examples of offshoring.

Offshore Outsourcing

When offshoring is combined to outsourcing, a new business process is formed. The process of transferring one’s operation or service to another firm in a foreign country is called ‘offshore outsourcing.’ One example of offshore outsourcing is when a client, who is based in a western country, gets the services of a web development company in the Philippines.

Since offshore outsourcing is an amalgamation of offshoring and outsourcing, it obviously inherits the benefits of the two popular business strategies such as the following:

Economical- Outsourcing of services to another firm is cheaper than to hire in-house staff to get the task done. Same thing when a company is offshoring its services to a developing country because of the low labor cost. Hence, offshoring and outsourcing your business’s needs to low-wage countries at the same time, means saving a lot for your company.

Skilled and Expert Workers- The fact that offshoring and outsourcing are becoming popular business trends nowadays means that there are some foreign countries, which can give you an access to a pool of talented and skilled individuals, with particular expertise that local companies cannot provide. A good example is the growing call center industry in the Philippines. The country is not only rich in natural resources, but also to human resource who can speak English fluently. Hence, the Philippines is very ideal for business process outsourcing.

Focus more on Business- Because of offshoring outsourcing, companies can focus on their core business and let the third-party vendors do the non-major tasks such as web design and development, customer services, accounting, manufacturing and the like. Hence, companies can focus on the internal function like business management.

Quality and Competency- Offshoring outsourcing vendors have their own field of expertise to offer to different industries. And sometimes, small to medium and even large-scale businesses are lacking of this expertise to do a particular task. Hence, it is more effective to delegate these activities to an expert offshoring outsourcing firms to ensure quality products and services.

Labor flexibility- Some projects that do not require a longer period of time to finish. For example, a mobile web development project may only last for 3-6 months or more, but may not reach a year to finish the project. So it is not feasible for a company to hire a web designer and developer that will only work for them for a short period of time. Therefore, it is better to outsource short-time projects to offshoring outsourcing firms because they can provide labor services for a short period.

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  • http://kenyonmullen.weebly.com/ GraidenFry

    The process of transferring one’s operation or service to another firm in a foreign country is called ‘offshore outsourcing.’

  • http://uptonemerson.weebly.com/ travissantos

    offshoring outsourcing, companies can focus on their core business and let the third-party vendors do the non-major tasks such as web design and development, customer services, accounting, manufacturing and the like.

  • AICOM Services

    Outsourcing lets the company focus on the core values of the business and takes care of the mundane tasks. AICOM is a company that gives you the best solutions that your company requires without compromising quality and shares company responsibility to attain the same goals at significantly lower costs.

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  • Michael Bian

    Outsourcing is important for several reasons.

  • newtrends tech

    The process of transferring ones operation is called offshoring, then what is the difference between offshoring and outsourcing?

  • newtrends tech

    The process of transferring ones operation is called offshoring, then what is the difference between offshoring and outsourcing?

  • http://www.weboutsourcing-gateway.com/ Web Outsourcing Gateway

    Basically, Offshoring simply means a “work is being done in other country” country that has more personnel that are skilled in a specific task. On the other hand, outsourcing is taking the chance of letting other people or organization do the work for a company; it can be on the same country or outside the country.

  • newtrends tech

    Actually I am quit confuse about that But u clear my confusion in a simple way. So thanks a lot.