Onshore Vs Offshore Outsourcing
January 17, 2017
Today’s business sector is enjoying a massively changing and dynamic industry, particularly when it comes to subcontracting jobs. In the past, the conflict were between doing the job through in-house workforce or outsource it but with the rapid changes in the global economy, this has changed to whether offshore outsourcing or onshore outsourcing will serve the purpose of getting the jobs done. Onshore outsourcing refers to when the job is sent on locally based service or product supplier while offshore outsourcing is exporting the business process outside the country where cheaper labor cost is available. Both these types of business models have become largely popular even if each one has its advantages and disadvantages that can significantly affect the entire business.
Both onshore and offshore outsourcing is geared towards achieving the same goal and that is to minimize and significantly reduce operating costs while raising their productivity levels and reallocating the financial resources on other areas. Onshore and offshore outsourcing like inbound call center has a number of benefits, but if you learn more of these business models, it can help increase the potential of a particular business, it is best to also know the disadvantages that come with onshore and offshore outsourcing.
More often than not, onshore and offshore outsourcing models like most of the inbound call center today offer excellent deals for majority of companies opting to integrate this in their business operation. With onshore outsourcing, companies are able to take advantage of the proximity of the mother company to the organization where the business process is being outsourced. This means that there is no communication barrier to deal with and that makes traveling a lot easier than with offshore outsourcing. The only drawback to this is that the company has to deal with a much higher labor cost and various business regulations implemented locally. For example, onshore inbound call center has a much expensive labor cost compared to its offshore counterpart.
With offshore outsourcing on the other hand, the company can take advantage of a much lower labor cost because the operational expenses spent in business processing are largely minimized when it is outsourced outside the country. Most inbound call center opts to outsource the process out of the country because it is cost effective in their operation while allowing them to obtain qualified workforce at a fraction of the price when the business process is done onshore. Although there are additional operational expenses that must be considered in offshore outsourcing, companies are still able to compensate their losses from the cheap labor cost they can obtain outside the country.
The bottom line here is that as long as it can serve the business purpose for success and great profitability, onshore and offshore outsourcing is designed to perform effectively. It will all come down to the company’s decision on which of these models will allow them to enjoy the maximum opportunity for profits and ROIs while keeping their operational expenses down.