What is offshore outsourcing, and what is the difference between onshore and offshore outsourcing? What does it all mean, why is it the latest outsourcing trend, and where should you start?
Table of contents
- What is the difference between onshore outsourcing and offshore outsourcing?
- Examples of offshore outsourcing
- What are the different outsourcing options?
- What influence do cultural differences have on outsourcing?
- What are the advantages of offshore outsourcing?
- Offshore outsourcing and innovation with Zeitarbeit International
- You might also be interested in
The term offshore outsourcing refers to commissioning an external organisation to carry out specific tasks. This takes place in a country different from the one where the products or services were actually developed or manufactured. Let’s take a closer look together at the comparison between onshore and offshore outsourcing.
What is the difference between onshore outsourcing and offshore outsourcing?
There are different outsourcing strategies. Let’s compare onshore vs. offshore outsourcing. The difference between offshore and onshore outsourcing is exactly what it sounds like. Offshore outsourcing refers to outsourcing to another country, not to be confused with nearshoring – outsourcing to a neighbouring country. Offshore outsourcing can be carried out anywhere in the world. In onshore outsourcing, an internal process is outsourced to a third party within the same country.
Examples of offshore outsourcing
- WhatsApp: Numerous software development processes were relocated to Eastern Europe.
- Apple: Production units were relocated from the USA to China.
- Google: The company's research and development (R&D) department was relocated to Ukraine.
- Amazon: Customer service was extended to the Philippines and other outsourcing countries such as South Africa.
These companies can therefore experience cost savings through outsourcing. These are good examples of successful outsourcing and highlight the global outsourcing trends.
What are the different outsourcing options?
There are several processes that are more cost-effective when Outsourcing is utilized. Some of these outsourcing processes are:
- IT and tech support: IT offshoring is a very popular outsourcing process and is currently at the top of the list, as there is a global shortage of IT specialists.
- Customer service: This is the second most popular offshore service to be outsourced — not only because of cost savings, but also due to the additional languages that can be used in other countries.
- Marketing and sales: This area is also often outsourced, as different languages are frequently required in sales and marketing.
- Accounting and administration: These areas are also outsourced thanks to cost savings, smoothly and successfully.
What influence do cultural differences have on outsourcing?
In offshore outsourcing, it is all the more important to take cultural differences into account. Since outsourcing can be uncharted territory for many companies due to cultural differences, businesses need to familiarise themselves with the other culture in order to communicate more effectively with their outsourcing countries.
What are the advantages of offshore outsourcing?
There are many advantages to offshore outsourcing. Here are a few points:
- Cost savings through outsourcing: There are many cost savings with offshore outsourcing. One of them is that services are offered much more cheaply in other countries. Whether it’s specialists in IT, administration, or sales — since these are often developing countries, outsourcing countries have a much lower wage rate for the same service, which would be twice as expensive in the country of origin.
- Enables focus on the core business: What makes offshore outsourcing successful? Primarily, it’s because an offshore service provider focuses solely on one task of your company — that’s what makes outsourcing so effective.
- Access to specialised experts: Another reason why offshore outsourcing has become a global outsourcing trend is that companies gain access to specialised professionals. These are available only in the outsourcing countries and not in their own. A few examples include language skills or a shortage of IT specialists.
Some aspects to pay attention to in offshore outsourcing are quality management as well as outsourcing and data protection. The reason is that monitoring from a distance can be a challenge in this regard.
Offshore outsourcing and innovation with Zeitarbeit International
It can be difficult to find the right outsourcing countries due to differences in culture, laws, and the compliance requirements in outsourcing that must be observed. We can help you — we have over 25 years of experience in offshore outsourcing. Here are some areas where we can support you:
- Drafting contracts for offshore outsourcing
- Offshore outsourcing cost-benefit analysis
- Compliance with regulations for offshore outsourcing
- Quality management in offshore outsourcing
- IT offshoring
- Remote Teams placement
- IT resource management
- Support with cultural differences in offshore outsourcing
- Consulting on offshore outsourcing risks
We are your reliable offshore service provider, contact us today!