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The Pros and Cons of Offshoring

 

From manufacturing to technical and customer support, lots of businesses outsource entire operations and processes to offshore staff. This includes administrative tasks, too. Why do they do it? Here, we’re going to look at the main benefits of outsourcing and offshoring. Every decision in business has its costs, however, so we’re going to look at the disadvantages, as well.

 

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Pro: Lower costs

 

Offshore service providers often cost the business less than outsourcing locally or managing the process involved internally. There’s a significant chance that the average earnings of an offshore team are lower than a domestic equivalent, but it’s not just in worker pay that you can save. You can also save time and money that might otherwise be spent investing in the training, infrastructure, and equipment you would need to make these processes internal.

Con: Language and culture

 

Many offshore service providers endeavor to staff their teams with fluent English speakers, but even the use of English can change greatly from one country to another. In customer-facing roles, they may have difficulty being understood not just due to language but to cultural differences, too. This can not only negatively affect customer satisfaction, but your ability to efficiently communicate with them too.

Pro: Expand your capabilities with ease

 

The immediate access to a workforce with the technical skills you need can be a huge benefit to any business. Many of the popular offshore outsourcing services have a huge market of high-tech workers who could lend their expertise to your company. You could potentially have more difficulty or at least more time trying to find people with the equivalent skills near you.

 

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Con: Quality control gets more difficult

 

This is somewhat linked to the potential language and cultural barriers. Distance and difficulties in communicating can make it harder to ensure any kind of quality control of an offshore team. Even when you outsource, you need to be assured that the outsourced team is providing the kind of quality that your customers demand, as their work reflects directly on your company. You can’t be sure that an offshore service is up to your quality standards all of the time.

Pro: Saving a lot of time

 

Outsourced teams can help business owners and their staff save a lot of time on work that might otherwise interfere with their primary roles and duties. This can improve company productivity across the board and help create a less stressful environment. This allows you and your team the freedom to be more creative and innovative. You can focus on working on the business, rather than in it.

 

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Con: Public perception

 

On the one hand, providing work opportunities for businesses and individuals in developing countries and supporting their growth can be branded and seen as a good thing. There are, however, a range of potential public image mishaps. While fewer regulations in overseas labor might help increase the return on investment for those processes, there are issues like potential labor abuses to be concerned with. If your company is linked to such bad practices, it can significantly harm public perception to the point of even a boycott.

Pro: Improved delivery time

 

The time it takes to scale the business and implement the new team, tools, and processes to tackle a new service or project is not insignificant. What’s more, the scaling phase is fraught with risk. Don’t fully anticipate your need for new resources, for instance, and you can be stuck half-way without the capabilities you expected. Outsourcing to other services means you’re taking advantage of resources and expertise that’s already there, saving you a tremendous amount of time. What’s more, in offshore teams, the costs of scaling could be way reduced.

Con: Potential security risks

 

From your intellectual property to your sensitive data to your physical resources, a business must work hard to protect what is most valuable to them. When outsourcing, sharing any of these takes them out of your responsibility. If you trust the wrong offshore service provider that don’t put as much focus or investment into security, it could result in some of your most precious resources falling into the wrong hands. This might not only mean soaring costs, but potential liabilities if, for instance, customer data is stolen.

There are plenty of advantages to outsourcing but offshoring often brings with it risks that need to be considered. Put into perspective the savings earned versus the potential cost if any of those risks come to light. Many of the particular cons of offshore outsourcing can be mitigated by instead choosing a domestically located team. You have plenty of options, you just have to take the time to work out the pros and cons of each.


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