Why Resources Matter When Choosing Outsourcing or Offshoring?
Regarding cost-efficiency, offshoring and outsourcing are consistently among the top business solutions for companies. Organizations in need of it can pick one over the other, but there needs to be a strategy to make the most out of your investment. As a result, offshoring vs. outsourcing becomes a heavily debated topic on which is better for businesses, and it will take a lot of strategic planning and thinking to do it. One area where businesses might lean more toward one side over the other is access to resources, but there is more to that discussion than one might think.
What is the Difference Between Offshoring and Outsourcing?
It is understandable for people to confuse offshoring with outsourcing, with the latter being a more popular term in the business landscape. After all, both business solutions use the same principle for their value proposition: providing clients with professional talents to complete certain business functions. Still, their differences are clear.
Offshoring pertains to the strategic relocation of a business function, wherein companies move part of their operations to other countries for lower costs, more flexible tax codes and regulations, and better talent. In outsourcing, organizations hire individuals or another party outside the company to perform services remotely, even if traditionally performed in-house. In summary, both offer long-term solutions that will save businesses significant expenses and scale up globally. However, the difference lies in the elements surrounding the primary service, which companies should consider when choosing between offshoring and outsourcing.
Why Offshoring Offers Better Resources than Outsourcing
Outsourcing will always be the first thing that pops into mind when business owners want to save on costs and move business functions to strategic locations. Trends of businesses resorting to outsourcing continue to rise, even after the significant increase during the pandemic. However, every business owner must be strategic in their investments, leading to comparisons with similar business solutions. This is where offshoring becomes a rival to outsourcing.
When outsourcing, companies delegate services to another party or agency. However, every business has a standard for how its operations should run. The programs and software used, the applications and devices used, the communication channels set up, the security standards involved, and many more will become points of contention if outsourcing is worth the investment. While businesses can take the time to onboard the freelancer or the outsourced professional, it might take a lot of time and expenses to ensure they have everything needed to perform their duties exactly how it needs to happen. If unwilling to do so, companies seeking outsourcing will have to consider adding those requirements and qualifications to their job ads, limiting the number of potential applicants in the global market, and adding more to the competitive salary to encourage people to apply.
Offshoring, however, offers a better alternative when handling resources surrounding what an outsourced employee or team needs to perform their roles. When businesses choose offshoring, they will work with offshoring firms that can help set up end-to-end tailor-fit solutions, from the devices and programs the offshore team needs to the support services necessary to keep them satisfied with the setup.
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A recent study by KPMG has revealed that businesses are more likely to opt for offshoring instead of outsourcing. This is because the former can offer greater control, higher performance, better cost savings, and higher employee engagement than the latter. Those features are possible because of the resources offshoring firms provide for their clients.
When Are More Resources Useful When Offshoring or Outsourcing?
Of course, the use of either offshoring or outsourcing is on a case-to-case basis. Business strategies (and funding) will vary according to the organization’s needs. Still, it might be ideal to know when extra resources can become helpful for a business.
Here are a few situations where offshoring solutions and their extra resources offer a more attractive package than outsourcing:
- When a company considers the strategy a long-term business solution
- When a company looks to save up on high costs when hiring entire business functions outside the country
- When a company needs help with IT support, payroll, recruitment, and employee engagement efforts
- When a company needs bespoke suites for remote employees or teams
- When a company plans to create a strong presence in a foreign country to hire more people or expand globally
- When the remote employees or team must work without daily supervision
Of course, some outsourcing entities can offer resources like offshoring, but they are often limited to the client’s needs for the outsourced tasks. Outsourcing is also ideal for companies looking for contractual, project-based, or short-term solutions. But offshoring is the better alternative when organizations need extra resources like facilities, recruitment assistance, support services, and long-term remote operations.
Why Partner with iSupport Worldwide for Offshoring Solutions
The Philippines is one of the major destinations for businesses that consider outsourcing and offshoring as essential operational strategies. If you want to take advantage of the extra resources that come with offshoring, you can partner with iSupport Worldwide.
iSupport Worldwide is one of the most decorated offshoring companies in the Philippines. Clients have access to world-class Philippine talent, as well as resources that power remote teams to perform productively.
If you want to take advantage of the well-decorated offshoring solutions that iSupport Worldwide can provide, book a quick 15-minute meeting here.