Clerk-Tech

Offshore Outsourcing

An powerful tool to leverage talent

More and more IT businesses are engaging in offshore outsourcing these days, as it allows businesses to save up to 40% on overhead costs and has several other advantages, too. Offshore outsourcing can be a game-changer for a company, but what exactly is offshore outsourcing?

It can be regarded as a process of coordinating with an external entity and delegating some of your business processes to that entity. Offshore outsourcing enables businesses to have high-quality results at a relatively lower cost of operation.

However, offshoring does also possess some resistance as a term, which is likened to “exporting jobs” and also that barriers should be placed in effect to discourage it. Such claims disregard the numerous advantages of offshoring, which include enhanced organizational performance and the potential to extend activities abroad.

In recent years, offshoring has undergone a major change, it has been more productive than ever!

Several service-oriented companies around the world have adopted it, particularly in business sectors such as professional, technological, and IT.

Before diving into the topic of potential advantages & reasons to adopt offshoring, let us take a glance at types of offshoring for better understanding.

  • Offshoring relating to technologies or the cloud, such as computer programming, is referred to as Information Technology Outsourcing (ITO).
  • The conception of software.
  • Contracting out administrative services to a third-party provider is referred to as Business Process Outsourcing (BPO).
  • The method of offshoring that entails or necessitates a higher degree of technological competence and expertise, is referred to as Knowledge process outsourcing (KPO).


Do what you do best, Outsource the rest
-Peter Drucke

Potential Advantages of offshoring 

 

Ability to find skilled expertise in a Specific Field:

It can be pricey and hard to identify a specialized workforce domestically therefore, offshoring these workforces, such as IT or financial services can be advantageous. 

Conceptual framework outsourcing, or offshoring these specialized business functions, allows businesses accessibility to employees with niche expertise at lower wages and with much less competition, leading to lower recruitment costs and ultimately enhanced market results.

 Availability throughout 24/7 

For sectors such as retail and media, the internet has made standard business operations almost redundant; today, when a consumer has a problem with a product/service, they want it fixed straight away, even though it’s 3 in the morning. The global consumer expects to service 24 hours a day, seven days a week. 

Offshoring allows businesses to provide round-the-clock service by using staff in a variety of time zones.

Cost-cutting

The most common reason for outsourcing to other countries is to save money, but the benefits might not be as significant as you would think. According to experts in the sector, companies that outsource to other countries save about 15% on the scale.

These savings can be achieved by lower labor costs, lower material costs, improved productivity and increased new services.

Will have more opportunity to plan on core strengths

Businesses will get more time to focus on their key business processes, while tedious, time-consuming processes will be delegated to outside entities. This way, they can focus and as well as reflect on their core processes. Enable the companies to sophisticate their processes through having control over the entirety of every company element. The company can train its workers and ensure that everything is completed and carried out according to their requirements as the sole source of guidance.

This leads to increased productivity and a better sense of well-being.

pexels-david-mcbee-730547

Reasons to rely on Offshore Outsourcing

Don’t need to ever worry about infrastructure

Companies don’t need to update the infrastructure & software, invest in better infrastructure, or not have one at all. Full infrastructure is provided by an offshore software development hub or entity for all of the work it can outsource to the company.

There are no long-term commitments

The company may discuss it with a third-party entity for a single task, sign the contract and complete it within the specified time frame.

Reduced time-to-market

The most critical strategic strengths for any corporate industry are reducing cycle times and providing services quicker and more efficiently. Companies will be able to substantially reduce the time-to-market owing to the accessibility of fully prepared office infrastructure and labor force at any time.

Transferral of funds

Offshore outsourcing enables companies to free up funds therefore, they can focus & transfer the funds to core operations and facilities that they couldn’t previously afford. Companies no longer have to own and operate optimum growth technologies, hardware, or workplace infrastructure when they outsource to third-party entities. It will be handled & provided by the 3rd party entity for them.

To minimize unanticipated costs

By selecting a reputable Offshore outsourcing entity, you will eliminate any unexpected costs. These facilities provide straightforward pricing, allowing you to prepare your financial plan. As the service provider will be responsible for all legitimate costs, there will be no unexpected costs.

“GLOBALIZATION HAS CHANGED US into a company that searches the world, not just to sell or to source, but to find intellectual capital 

THE WORLD’S BEST TALENTS AND GREATEST IDEAS”

 – JACK WELCH

pexels-fauxels-3184450

Bonus facts:

 

India is indeed the world’s leading provider of offshore outsourcing.

Almost in all areas of the operation, India offers facilities and support as an offshore provider. The majority of these offshore outsourcing countries provide software support, call center services, data input assistance, programming services, and other similar services.

Consider the following statistics:

  • Offshore outsourcing is something that more than 44% of chief intelligent officers want to do.
  • Offshore outsourcing is used by 24% of small businesses to improve production.
  • The primary motivation for IT outsourcing is cost reduction.

According to the 2017 outsourcing statistics, India ranks first with a 7.07 index, followed by China with a 6.31 index. 

Offshore outsourcing has the social downside of creating job shortages in the home country. It’s a vicious cycle that begins with someone who is also well. In the end, even though each company is different, offshore outsourcing is still a boon for every organization.

 

Author –

       Amirtha Rathinavelu –  (Content Writer)

Share this post on 

Share on facebook
Share on twitter
Share on linkedin
Share on email