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What Is Offshore Outsourcing?

Offshore outsourcing is often confused with offshore outsourcing. However, there is a major difference between the two. While offshore outsourcing refers to the process of contracting a foreign third-part to do certain jobs for you, offshore outsourcing also refers to an agreement wherein the outsourcing company would invest in a particular country. In a nutshell, offshore outsourcing basically is about saving business owners money and time. This form of business collaboration was originally made to take advantage of certain countries’ low cost labor.

9 Pros And Cons Of Offshore Outsourcing In 2021 - Biz 3.0

In the IT industry, offshore outsourcing has become popular because it offers many benefits and advantages to companies. These include reducing operational costs because the company is not obligated to provide you with the exact services that you need; saving time because you are not forced to hire and train your own staff; maintaining communication channels with your overseas customer base; and many more. If you are interested in engaging in offshore outsourcing, you should consider several factors so that you will be able to make the best decision. Below are some of these factors offshore outsourcing:

There are two basic types of offshore outsourcing: onshore and offshoring. Offshore outsourcing entails employing the services of a third-party firm or individual to take care of the jobs that you need. Meanwhile, offshoring is when you contract an offshore firm or person to do the same job for you. Most business owners prefer the latter so that they can save money and time while they tend to focus on their core businesses.

Because of the inherent advantages and benefits of offshore outsourcing, a lot of companies and even governments have been using this strategy in order to increase the revenues and profits of their company. Although this technique works well and has been proven to be beneficial for both the parties, there are also some disadvantages that companies have to deal with when they use this strategy. One of the most common disadvantages of offshore outsourcing is the loss of productivity, especially when it is done in the area of staff augmentation. This is because the staff of the third party firm or the person doing the job will be working in a different country and therefore, will not be as knowledgeable with the language of that country. Another disadvantage of this technique is the loss of quality of labor. Most offshore labor is from developing countries hence, the employees have low skills and qualifications compared to the staffs in their country.

If you want to hire a third-party company to handle your offshore outsourcing projects, you have to make sure that they can deliver the services that you need and can meet your deadlines. You also have to check the experience and capability of the staff in dealing with different clients and tasks. Aside from these things, the most important factor that you have to consider when you engage a third-party company to outsource is the quality of customer support. This is because most of the time, customers have complaints regarding the quality of the product or the service that they have ordered and if your outsourced company is unable to address the problems, then you are losing a lot of money. Therefore, you have to make sure that you will only entrust your offshore outsourcing project to those companies or individuals that can provide high level of customer support.

There are some disadvantages of offshore outsourcing. However, you should not lose hope because there are already some companies and individuals that are providing good service. The good thing is that there are already some outsourcing companies that are willing to take care of your offshore outsourcing projects. However, you have to do a little research to ensure that you will only engage a company that can provide high quality service. If you will engage a third-party company to outsource, it is very important for you to determine their credibility, reputation, experience, and capabilities in the field of outsourcing.