Outsourcing or offshoring? Which one is better for your business?
In today’s fast paced world, getting a job done even when you’re not in the same region is not going to be difficult anymore. With the convenience of outsourcing and offshoring services, companies can reduce costs to speed up work efficiency by transferring different work tasks externally rather than completing them within their internal organisation. But, how do we determine which one is better for our business? Let’s find out.
Outsourcing refers to engaging work out to an external organisation. Generally, outsourcing is an effective cost-saving strategy when it is carried out in a timely order. One of its biggest advantage would be labour flexibility as it allows companies to outsource a certain project to a few people that are only required to work on the assigned task for several months. Outsourcing provides this flexibility easily without having to worry about hiring and firing during that period.
Next, focusing on your company’s core function is what you should be doing as it improves productivity when you outsource tasks that are important but not at your utmost priority list. This enables you to put more emphasis on more important tasks and allows you to be in better control of the tasks you would like to outsource.
While this may lead to a much faster turnaround during crunch time, the industry is currently seeing a cut in all operational costs. Reason being, to access the technology without investing a large amount of money to own any technology or software programme will always be the first choice in any business.
Often, people mistaken offshoring as outsourcing. But, there’s a difference in its business operation as offshoring means getting work done in a different country. More importantly, the strength of offshoring provides better availability of skilled people and this usually means getting a large amount of work done much faster through a global talent pool – the right talent improves work efficiency and completes any assignments as assigned by you.
Also, offshoring is essentially good to keep you focus and spend more time on your core business processes and helps you to balance any workload you currently have. Then again, you’ll need to be conscious about the differences in time zones as you’ll be hiring offshore talent across other countries. To make it work, it would be best to ensure that any plans to your project would be conducted in a timely manner to avoid any unnecessary delay in your project timeline.
However, one of the plus points in offshoring business is that it is easy to set up at a lower cost as the business process or service that you are in would be easy to replicate in another country – it is possible when you have the current skillsets and staff who require minimal supervision and training. Reason being, the business you are in will contain the same processes for it to be repeated in each project, hence it becomes simpler to establish a high performing organisational culture.
What’s good for my business?
All in all, due to countless positive benefits of lower costs, efficiency, and labour flexibility, it varies for every business owner especially in the nature of business you are in. You may find offshoring works for you better instead of outsourcing or vice versa. However, there is no doubt that both offshoring and outsourcing allows your business to focus on its core competencies.
Before deciding whether it’s either offshore solutions or outsource services you would like to go with, it would be ideal to weigh the pros and cons and perform a thorough analysis of your business to identify both its strengths & weaknesses. In that way, it helps to paint a better picture to give you an idea on what’s best for your business prospect.
But, one thing we do know for sure is that our offshore team at AS White is always reaching out to partner with you to build a high performing offshore global team. Contact us today to learn more about our available offshore solutions – we look forward to a long partnership and attaining your business goals at the same time.