What Makes An Offshoring Strategy Effective

13 Oct 2021

Diversify knows what workforce strategies an offshoring approach can form. One of the things we emphasize is how offshoring differs from outsourcing and how it offers more benefits to many businesses across a wide range of industries.. The global pandemic showed us that with the benefits of having a remote team, developing a strategy around it is necessary to ensure business continuity. Outsourcing is a reliable, proven and cost-effective approach. An offshoring strategy does the same but offers added benefits without the need for certain limitations. 

As concepts, there is some truth that offshoring and outsourcing are the same. Especially now as both offshoring and outsourcing teams are able to work remotely or report to an office daily. As mentioned, both are synonymous with remote team collaboration as a cost-effective measure. However, when considering business objectives and projects,  knowing the key difference between the two can help you maximise its advantages further.

How Outsourcing Works

Let’s look at outsourcing briefly. Outsourcing presents itself as a broader, more generalized option for businesses. Companies that want immediate results on a fixed schedule find outsourcing to be their best strategy. They compensate teams based on their completed objectives. Outsourcing is commonly associated with being “low cost” labour in other countries. India in particular specializes in outsourcing so much that it is synonymous with the term. 

This comes with a few caveats. Entrusting the process to providers means that clients do not control who joins their team or what their roles are. The service provider has full control of staff members. They can opt to change who is assigned to a client at any moment. Despite this, the option for easily changeable staff is an attractive one for some as it improves the quality of work right away.

What An Offshoring Strategy Does Better

The biggest difference that offshoring has from outsourcing is control and transparency. Compared to outsourcing, offshoring involves a full hands-on process with a team that acts as an extension of their local one. Companies oversee their team’s daily operations and have the final say in their responsibilities, approach and overall culture. This covers everything from staff development, IT and HR support, and even professional career planning. Companies can choose to simply assist with the staff selection process, or get down to the nitty gritty in acquiring full offshore services. Offshoring believes more in staff retention and cultivating the skills of team members. The approach is more about the long term and making their remote team as much a part of their local one.

Offshoring’s approach to cost reduction is unique as well. Through the reduction of overhead costs, companies can redirect resources locally to improve productivity and create more opportunities. At the same time, it allows them to focus on core competencies and entertain potential revenue generating tasks. This leads to increased efficiency, enhanced operational procedures in delivering quality service.

With talks of a “new normal” taking over, business strategies needed to be revised and offshoring proved what it was capable of doing. This is seen when it comes to addressing labour costs and competitiveness, while also maintaining control and transparency. Businesses remained competitive through offshoring’s highly valued services that provided effective service level tasks with flexible work schedules.

The Right Strategy For The Best Experience

Diversify encourages business leaders to take on an offshoring strategy mainly for its wider benefits compared to outsourcing. With more control and transparency, it is an ideal workforce strategy to consider. However, providers should analyze their business objectives to see if an offshoring approach is the right fit.  We make it clear that offshoring, for all its advantages, may not be the right approach for all. Like any other strategic approach, it is not without disadvantages. We also emphasize that offshoring is not just a cost cutting measure. Rather than a replacement for staff, it is an augmentation of your current setup for the further growth of your business.

The right strategy also shapes your overall offshoring experience.

From our perspective, we believe in offshoring’s transparency and staff control as a competitive approach to help businesses achieve long term growth  To help our clients achieve this, we carefully customise our approach and determine how to best implement this strategy without disrupting their ongoing operations. Doing so lets companies explore new business models and opportunities with minimal disruption. With the help of modern technology, companies can further ensure quality in what they offer by making sure that offshored inputs meet their own quality standards.

As noted earlier, offshoring and outsourcing approach cost savings in different ways. We want what is best for potential clients and wish to give them the best experience possible. We believe that by doing so, it betters how people view offshoring and the BPO industry as a whole.