Which Is Better, Offshore Or Onshore Outsourcing?

Most organizations now benefit from outsourcing some of their business functions such as IT outsourcing, development, legal process outsourcing (LPO) and more. By outsourcing back office tasks, companies can focus on their core business. Instead of training new in-house employees and investing in their salaries and infrastructure, it is better to outsource the task to an experienced service provider. This will save your time and money. Outsourcing provides options to find the right talent, irrespective of their location and time zone. A professional business process outsourcing company will make sure to provide flawless services, without any hidden costs. Some of the common BPO processes that can be outsourced include accounting and book keeping, data entry, text and editing services, image manipulation, OCR clean up, data mining, data scrubbing, transcription, data conversion, document scanning and more.

Outsourcing mainly falls under three models – Offshore, Onshore and Nearshore. There are pros and cons to all of them. It’s essential to define which model of BPO outsourcing fits your company best. Often, companies make a choice between onshore and offshore models.

Onshore Outsourcing

Onshore refers to local outsourcing or outsourcing to service providers located in the same country or region. With this outsourcing model, you’ll be likely speaking the same language and the team will be working on the same time zone and these factors make communication with an onshore outsourcing company quite seamless. The team is easily accessible. As there are no cultural differences between you and the business process outsourcing services company, you will be sharing the same holidays and this makes the work run efficient. There are many disadvantages as well. The cost will obviously be higher, compared to the offshore model. Also, you may not find a great pool of experts in the world with onshore outsourcing.

Onshore Outsourcing Pros and Cons

Pros

• No language barriers or cultural differences
• Time zones are same or closely aligned
• Easier to communicate, meet or conduct training
• Local outsourcing firms have extended knowledge of market
• Share the same intellectual property laws
• Easier to deal with quality control issues

Cons

• Cost would be a lot more than offshoring or nearshoring
• A smaller pool of experts

Offshore Outsourcing

Offshore outsourcing refers to the company hiring a team in another country with a different time zone. Here, projects are sent to specialists located overseas for completion. Outsourcing BPO or IT tasks to a different country helps you get quality services at a low cost. This is the major reason that most organizations opt for offshore services. Clients may experience language and cultural differences while dealing with an offshore company. Communication may not be that easy. However, there are reliable offshore BPO companies that offer round-the-clock support to their clients.

Offshore Outsourcing Pros and Cons

Pros

• Labor cost is low compared to hiring domestic workers
• Get the services of skilled or highly expert workers
• Quality services which can meet all custom requirements
• Maintains strict deadlines
• Communication with customers either via phone or email

Cons

• You have to deal with different time zones
• May experience delays in communication
• Team may not be familiar with your country’s business environment

For both onshore and offshore outsourcing to work out well, it is important that you implement a risk management plan and an effective management plan.

Nearshore outsourcing refers to outsourcing tasks to a neighboring country with similar time zones, which is a short distance away. In this method, onsite visits can happen faster and more frequently. Compared to onshore outsourcing, nearshore still offers some cost savings and quality software results. This outsourcing method is a perfect balance between the benefits of offshore and onshore.

If your business requires the same regional language knowledge as yours and frequent direct visits with the outsourcing team, it is ideal to choose the onshore or nearshore outsourcing method. At the same time, if you’re concerned about high costs and require expert services with better quality, consider offshore BPO services.