Outsourcing, also known as business process outsourcing (BPO) has become a popular way for organizations to maximize revenue and reduce costs by subcontracting elements of their services to third-party vendors.
Now that remote working has become the norm, offshore outsourcing, in particular, has become common among large corporations. It’s long been used by well-known industry giants such as Walmart, IBM, Delta, Amazon, Uber, and Apple. But in recent years, small companies, startups, and growing enterprises have started taking advantage of the benefits of offshore outsourcing as well.
But what exactly is offshore outsourcing? What services can you outsource? And is an offshore BPO the right solution for your business? Here’s everything you need to know.
What is Offshore Outsourcing?
Offshore outsourcing refers to the practice of using a third-party supplier in an overseas location to perform a selection of your front and back-end office tasks. Offshore outsourcing allows senior-level staff to have less involvement with staffing issues and day-to-day business operations and spend more time focusing on core strategies and business-critical tasks.
Typically, overseas outsourcing utilizes staff in countries with lower labor costs but high levels of education, expertise, and fluency in English. Asia is a noteworthy hub for this, and location examples include:
- The Philippines
Other popular outsourcing locations include Eastern Europe, South Africa, Egypt, and Latin America (see below).
But outsourcing doesn’t necessarily always have to be conducted long-distance or even overseas. There are two other alternatives to offshore outsourcing to consider:
Onshore Outsourcing refers to subcontracting to companies located in the same country. Whether organizations choose to hire offshore vs outsource locally depends on a number of business-specific factors. While the cost savings are typically much more significant with overseas outsourcing, some companies may want to work with vendors in the same time zone or country as them. Onshore outsourcing can also be helpful when native language fluency or a close culture match is critical to the business.
Nearshore Outsourcing refers to subcontracting internationally but to a location closer to your main base of operations for ease of management and communication. For American companies, this includes options like:
- Costa Rica
- Dominican Republic
Offshore Outsourcing Pros and Cons
There are a number of advantages of offshore outsourcing. But it’s not the right fit for every company - there are a few tradeoffs to consider when comparing offshore outsourcing to in-house teams or local outsourcing. Here’s our comprehensive list of the pros and cons to keep in mind.
Ability to scale– This is often the primary reason for businesses - particularly startups and growing enterprises - to shift towards hiring offshore workers. Offshore outsourcing companies can add new agents quickly and help build the systems and processes needed to scale a customer service team.
Reduced Costs – This is another primary reason for businesses to shift towards hiring offshore workers. Cost efficiencies can be made in multiple areas, including:
- Lower wages
- Savings on staff benefit packages
- Reduced technology costs
- Reduced overhead expenses like rent, utilities, etc.
Specialized Expertise – It can often be challenging to find reasonably priced freelancers for niches like IT or financial services. In fact, IT offshore outsourcing is one of the fastest-growing areas in this field. Other popular processes that are regularly outsourced internationally include:
- Market research
- Customer service
- Web development
- Graphics and design
- Content management
24/7 Service and Seasonal Coverage – Outsourcing internationally means you can provide 24-hour customer service and technical support across various time zones without having team members work graveyard shifts. Plus, you can accommodate additional customer inquiries at peak periods like weekends and busy holiday periods. Because BPOs can reallocate staffing resources across different clients, they have more flexibility to respond to short increases in volume compared to companies hiring in-house.
Improved Focus – The ability to redistribute administrative tasks frees up time and resources. Your in-house staff will then have more time to focus on driving the business forward and generating higher revenue. Examples of essential but easily outsourced tasks include:
- Timesheet management
- Data entry
Less Control - By handing over the reins to an offshore outsourcing company, you’ll ultimately lose some control over processes that could lead to delays, missed deadlines, or customer complaints. So it’s imperative to use a reputable company and ensure the correct procedures are in place. After all, their staff will ultimately become representatives of your brand.
More Complicated Logistics - Offshoring outsourcing doesn’t come without its challenges. Operational challenges can occur due to several factors, including:
- Language barriers
- Cultural barriers
- Communication delays due to time differences
- Delayed decisions due to time differences
Public Image - Many Americans are outwardly disapproving of overseas outsourcing, and historically some businesses have experienced a backlash of criticism and customer complaints about their offshore hiring policies. Whether you think this applies to your business or not, we recommend you are prepared with the relevant facts and data to support your decision.
Types of Offshore Outsourcing Services
You can outsource for numerous job roles in either front or back-office environments.
Back Office Offshore Outsourcing Services
Content Moderation – The demand for content review, and content moderation can all be met remotely.
Research – Some of the most common knowledge processes are outsourced internationally, including market research, intellectual property research, and legal research.
Billing review & other accounting processes – Any high-volume, low-skill tasks currently completed by your finance department can potentially be done by an offshore BPO.
Front Office Offshore Outsourcing Services
Inbound and Outbound Phone Support – Call center tasks are a commonly outsourced operation.
Email Support – With training and well-developed quality assurance processes, overseas agents can respond promptly to your customers’ emails, using the preferred brand tone and voice.
Live Chat Support – Remote workers are often pros at providing exceptional service and converting your chatters into buyers.
Technical Support – By utilizing overseas agents to support your centralized Help Desk, you can respond to support ticket requests around the clock.
Is Offshore Outsourcing Right for Your Business?
Using an offshore outsourcing company is a flexible and low-cost way to continue delivering great service while also freeing up more time to focus on core business tasks. Outsourcing to overseas agents may be the right solution for your business in any of the following circumstances:
Your Business is Growing Quickly
Recruitment and training processes can be a drain on already stretched resources if your business is in a rapid growth phase. When you use an outsourcing company, they take care of all the hiring requirements, saving time and resources without sacrificing your growth strategy.
You Want to Improve Your Customer Journey
The customer experience should always be your top priority. Satisfied customers are return customers and vital sources of word-of-mouth recommendations. Offshore companies often hire the best in the business, and can help you meet customer expectations around response time and language needs. They also tend to have excellent policies for career development, continuous training, and coaching, which in turn ensures customer service scores remain high.
You’re Driving for Efficiencies
As the old saying goes, time is money. With overseas outsourcing, unnecessary downtime is eliminated because you can stipulate the amount of support you need and when you need it. Plus, outsourced workers with years of experience can often handle more tasks per shift than in-house staff while also keeping service quality high.
You Want to Explore New Market Opportunities
It’s often way easier to expand into a new geographical market when you already have a base close to your new end users. A good offshore outsourcing company should be able to advise you on best practices for market entry, plus provide the staff you need to execute the strategy.
Let Peak Support Be Your Solution
Offshore outsourcing offers an efficient and cost-effective way to drive your business forward without compromising service levels or quality.
Our dedicated teams at Peak Support have several years of experience and have worked with multinational corporations like Verizon, eBay, and Accenture. With Peak Support as your partner, you’ll be guided through all the key considerations to design and implement the right remote solutions for your needs.
Contact us today and discover how we can help optimize your support outsourcing processes.