Offshore Outsourcing – Advantages and Disadvantages

Offshore Outsourcing refers to the business practices of an organization shifting its primary production centers to a foreign location for cheaper labor cost and reduced overhead expenses. Offshore outsourcing is among the most cost effective forms of business outsourcing. When a specific organization of one country offers certain business projects or company services to another nation then it is termed as Offshore Outsourcing. This is extremely helpful in increasing the sales of a specific company located in United States but having low-cost production processes.

How to Evaluate an Offshore Outsourcing Vendor | Agilites

There are several reasons on why organizations prefer to hire foreign outsourcers to perform their work instead of hiring a local team. One of the major reasons is that most of these companies have high operating costs and they do not want to invest more than 30% of their total budget in building and maintaining a local work force. They also need to spend less in hiring services of a legal team, accountants and other management teams because they can get their work done efficiently and at a much lower cost. These are some of the reasons why companies have shifted to offshore outsourcing rather than hiring local staffs. By utilizing these techniques, they can save money and time by performing their required tasks in a more efficient manner offshore outsourcing.

There are many companies who are involved in offshore outsourcing and many of them are able to provide complete customer satisfaction. Most of these companies are located in Asian nations and they can offer their services to most parts of the world within a short period of time. The main advantage of using offshoring services is that it is a very viable business practice. Offshore outsourcing can help organizations achieve cost savings of up to ninety-five percent.

Many of these offshore outsourcing services offer a wide range of technological products such as website development, programming, database integration, custom software development, web site promotion, and many more. Some of these companies specialize in providing offshore programming services and can help individuals to develop their Internet applications from the comfort of their home. There are companies who are specialized in providing offshore technical support services. These companies are able to solve a wide variety of computer related issues and they can customize their solutions as per individual customer requirements.

Employers have many reasons to outsource to foreign countries. One of the prime reasons is that it helps them to reduce operational costs. Outsourcing helps to achieve cost reductions by eliminating nonproductive activities such as duplicate processing, outsource data entry, over-stocking of supplies, and many more. Another advantage of outsourcing is that it helps to maintain high quality control in case the requirement is very large. The quality assurance process can be carried out through in-house or offshore teams which work together through regular interaction with the client’s representatives.

The disadvantages of offshore outsourcing are also many. One of the disadvantages includes the loss of employment due to lack of physical presence in a particular country. The cost of employing skilled workers in a specific country may not be economically viable for large companies. In some cases, the skills required for executing the tasks may not be available in a foreign country because of language and cultural barriers.

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