What Every Business Should Know About Offshoring

30 Apr 2018

If your company has not considered offshoring key roles yet, there’s no better time to start than now. As technologies become more developed, so does the ease of communicating with others around the world. Business experts have consistently touted its benefits, especially in today’s globalized community.

Often cited as a modern business, offshoring helps businesses stay future proof amidst constantly changing ideas and technology. Companies that have adapted it are able to create their own brand of success through its cost saving, engaging approach and how it is able to take them to the next level globally.

The True Definition of Offshoring

With both offshoring and outsourcing under the BPO umbrella, some tend to lump both services together as having only minor differences. On the contrary, it is important for companies to know the major differences between offshoring and outsourcing. What a business could need may require more offshored functions rather than outsourced ones, and vice versa. In effect, this saves them time and valuable resources in attaining their business objectives.

With outsourcing, companies work with a third party provider that will supply the people needed for their particular functions. The outsourcing provider is responsible for much of the legwork while companies can focus on other objectives. Though not a very hands-on approach, outsourcing is able to bring what businesses need at a schedule set for them. On the other hand, offshoring requires more input and closer collaboration from businesses. With a more hands on approach, companies can intensively screen those who will be part of their team and what functions they will handle. Companies achieve this through constant engagement coupled with the plotting of future career paths for their team members. It is often considered a “smart, strategic decision” because of this.

Simply put, one is more process intensive while the other is more managerial intensive.

Given this, offshoring is also often mistaken as a less effective approach than freelancing. While they may also look similar on paper, freelancing has fundamental differences from offshoring. For instance, offshoring is a more cost effective approach even if it is pricier than freelancing. You also have access to much more dedicated team that has gone through rigorous company standards that you have set. It’s through these differences that show why offshoring is preferred by businesses than freelancing.

The Real Impact on the Local Workforce

Because offshoring deals with sending functions to other countries, there’s certainly going to be pushback to it. Some believe that it negatively impacts local employment and causes job loss. Over the years, we’ve seen that this is simply not true.

The truth is that while it does mean lesser roles available, it also means more opportunities open up locally. By sending administrative, low level functions to be offshored, local companies can shift focus on bigger, revenue generating priorities. This shift in objectives benefits both the company and the offshore team working with them.

The Range of Offshored Roles

When the BPO Industry first started out, only large, established companies were able to take advantage of this. Most of them did so by sending their customer service roles to other countries at a fraction of the price. It’s through this that services like offshoring are wrongly seen as being part of “the call center industry.”


Your offshore team consists of multi-skilled people that have exceeded your company’s standards.

Today, thanks to continuing evolving technologies, the roles that can be offshored have greatly expanded. On paper, the range of offshored roles may seem unusual, even impossible. Consider for a moment the role of an accountant in a company. They deal with your finances, thus needing extra discretion and security in their work. Sending such a vital role offshore does sound absurd. Some companies are even considering full teams because they see they see what proper offshoring does for them. Forward thinking companies today see the importance of offshoring and chances are, your competitors might already be doing the same thing.

Setting Proper Expectations

In recent years, more and more businesses around the world are seeing the positive effects of offshoring. It has greatly benefited the Australian economy, and it is slowly being recognized by more Canadian businesses. The need to be and stay globalized in today’s business environment is more important than ever.

So if your business has strongly considered it, your expectations also need to be tempered. Despite hearing about all the positives it can bring, offshoring is not something you can just implement on the fly. In fact, to truly see what it can do, business should stay committed to it for at least a year. Consider also some of the myths that you may have heard surrounding offshoring. You may be hesitant to consider adapting it because of stories about its cost, time and effectiveness. That’s why it is important to temper expectations with offshoring before making a major decision to use it.

Beginning Your Offshoring Journey

The time is ripe for businesses to offshore. For those that already are, it is also the perfect time for them to further enhance their offshoring potential. Though sharing similarities to outsourcing, it is consistently defining itself as a more cost effective and long term approach. Businesses have been benefiting from offshore teams for a long time now. When companies see that their competitors are offshoring before them, there’s a chance they will fall behind. With the right provider however, offshoring can be a positive experience for any business.

Diversify is fully equipped to help businesses begin their offshoring journey. Contact us today to learn more.