Onshore Outsourcing

Definition

Onshore outsourcing definition

Onshore outsourcing, also known as domestic outsourcing, is the practice of outsourcing business functions to a company in the same country where the business operates. It is becoming increasingly popular with businesses that are pulling their operations back to their home countries. Benefits of onshore outsourcing include smaller travel expenses, similar time zones, similar cultural expectations, and, on occasion, easier legal compliance. 

The cost of staffing is not as competitive as with offshore outsourcing. However, some experts argue that when taking all things into consideration, onshore outsourcing is just as competitive an option for business owners. Issues that can arise due to a mismatch in expectations can be more easily resolved because of lower travel costs and similar time zones, for example.

Onshore vs offshore outsourcing

Onshore and offshore outsourcing offer different benefits in terms of accessibility, language barrier, and cultural compatibility. 

Onshore outsourcing, for one, makes it easier for businesses to visit their teams onsite since they are only located within their home country. Thus, actual face-to-face meetings, team building, and collaborations are much easier and more fruitful. However, there is a possibility that their team will be affected by local calamities and disruptions like their in-house teams.

Offshore outsourcing, meanwhile, is more technology-driven. Teams collaborate with online tools for most of the time. Though, outsourcing partners still encourage their clients to visit their teams from the other side of the world and meet them personally. One advantage of it is offshore teams can’t easily be affected with the local calamities that can bring disruption to their business. This ensures continuity in providing services to their customers. 

Onshore outsourcing advantage

Most outsourcing companies establish a local office in the country they are servicing. Whilst most of the operations will be done offshore, the accounts executive team are usually based onshore to keep a good working relationship with the client. A lot of businesses have built their outsourced team with a mix of onshore and offshore talents.

Outsource Accelerator specializes in helping small & medium-sized enterprises (SMEs), with 2-500 employees, typically based in the high-cost English-speaking world. We are the experts in transforming these businesses with outsourcing.

Onshore outsourcing advantage
Onshore outsourcing advantage

Outsourcing FAQ

What is Fully Managed Outsourcing?

What is fully managed outsourcing?

Fully Managed Outsourcing is one of the many services offered online by various outsourcing companies. It is a kind of laser-focused management that takes over the business process and tracking of the organization’s KPI metrics, training and development of employees, and quality assurance for the client. When routine tasks and jobs are outsourced, the company will have more time to focus on the more essential aspects of the business.

Fully managed service

Working with a fully managed outsourcing can be beneficial to any specific organization. Despite working offshore, Business Process Outsourcing (BPO) companies can still provide a fully managed service to their clients. They ensure the best operational structure, competitive pricing structure, proven processes, and guaranteed results with their operational overseers. They can build a team and hierarchy; they do well-prepared implementation and alignment; and are also aligned to their high-quality mission, objectives, and culture. This kind of partnership promises a deliverable-based solution that can hit KPIs, targets, and metrics. Lastly, they can ensure continuous improvement as you go along with your business.

Outsource Accelerator provides you access to the best outsourcing companies in the Philippines, where you can save up to 70% on staffing cost. We have over 3,000 articles, 200+ podcast episodes, and a comprehensive directory with 700+ BPOs… all designed to make it easier for clients to learn about, and engage with fully managed outsourcing.

Offshore outsourcing definition

Offshore outsourcing definition

Offshore outsourcing is the process of getting jobs done from a far-off country. Companies prefer accessing other countries who have more resources for people with specialized skills. One popular example of offshore outsourcing is customer service through call center companies. These BPO companies offer quality customer service at a much cheaper rate than hiring locally.

Like nearshore outsourcing, companies prefer having minor tasks outsourced so that the in-house team could focus on the vital functions of the business. One perk of offshore outsourcing for businesses is that they do not need to think about the overhead expenses for the benefits of additional in-house employees.

Overall, the company could benefit from higher profits and lower human resources costs.

Offshore outsourcing examples

Companies turn to offshore outsourcing for cheaper wages and better quality work. Just like nearshore outsourcing, companies prefer having minor tasks outsourced so that the in-house team could focus on the vital functions of the business. 

One popular example of offshore outsourcing is customer service through call center companies. These BPO companies offer quality customer service at a much cheaper rate than hiring locally.

Offshore vs onshore outsourcing

The opposite of offshore outsourcing is onshore outsourcing, which is the practice of outsourcing your business functions and non-core teams to a BPO firm in the same country where the business operates. It is also commonly referred to as “domestic outsourcing.”

Unlike offshore outsourcing, the business does not save as much on employment costs – which is the main reason why businesses turn to outsource in the first place. Since the outsourcing provider is in the same country, both companies will have the same cost of living and labor laws applied.

However, with onshore outsourcing, you wouldn’t have to deal with cultural and time-zone differences.

Offshore outsourcing pros and cons

Companies can turn to offshore outsourcing for almost every business role – whether they’re in need of customer service teams, virtual assistants, bookkeepers, graphic designers, IT consultants, and more. Further, before diving into the world of offshore outsourcing, it’s best to be informed of its pros and cons.

Pros of offshore outsourcing Substantial savings Access to a flexible, diverse, versatile, and proficient offshore team Experienced and competent team leaders will guide your remote team Diminished cost and less legal responsibilities (because your outsourcing provider will take care of everything) Cons of offshore outsourcing Occasional delivery delays Time zone and cultural barriers Possible disclosure of confidential information Offshore outsourcing Philippines

The Philippines is named as the leading offshore outsourcing destination in the world. With 1.3 million BPO workers and counting, large corporations and even small to medium-sized enterprises all over the world trust that their Filipino workers and remote teams can provide excellent outputs, customer service, or IT assistance at a cost-effective price.

Outsource Accelerator provides you the best customer service outsourcing companies in the Philippines, where you can save up-to 70% on staffing cost. We have over 3,000 articles, 200+ podcast episodes, and a comprehensive directory with 700+ BPOs… all designed to make it easier for clients to learn about, and engage with, outsourcing.

Nearshore outsourcing definition

Nearshore outsourcing definition

Nearshore outsourcing is a smart way of hiring people from a third party source of skilled workers for a short or long term project. The contracted workers are from nations near the hiring company. Companies could save a lot from outsourcing than hiring an in-house team. Most employers would typically hire workers from overseas where rates could be lower. However, time is a huge concern. The need for hiring workers with similar culture and language has birthed to nearshore outsourcing.

Some companies get third-party outsourcing partners because skilled workers are abundant for that job in an overseas country. Benefits of nearshore outsourcing include cost savings while compensating for the shortage of in-house staff. In turn, this process helps improve the efficiency of a company. Even if workers come from a different country, the spoken language will be similar. It is also ideal for a company to outsource back-office tasks for lower wages while in-house staff focuses on the more critical roles and functions in the company.

Philippines and nearshore outsourcing

To reap the maximum benefits nearshore outsourcing, one must take due diligence in looking for the best partner that can attune to your business’ requirements. The success rate of nearshore outsourcing significantly increases with collaborative efforts between you and your outsourcing provider, streamline processes, open communication, and common goal setting.

Outsource Accelerator is the most trusted source for independent information & advisory for Business Process Outsourcing (BPO). We have over 3,000 articles, 200+ podcast episodes, and a comprehensive directory with 700+ BPOs… all designed to make it easier for clients to learn about, and engage with nearshore outsourcing.

What is Business Process Outsourcing (BPO)?

What is Business Process Outsourcing BPO?

Business Process Outsourcing (BPO) is the engagement of services from a third-party provider. BPO uses various technology-enabled services to hasten the delivery of services. The business activities could be back-office such as, but not limited to, payroll, accounting, human resources, or front office jobs like customer service, sales, and marketing, etc. In the case of content providers, these business activities could mean hiring writers, remote editors, or virtual assistants.

BPO speeds up processes and enhances efficiency. Companies that outsource some of their business activities use their time on core services and competencies. With this shift in focus, companies improve their current processes that may result in improved customer satisfaction. BPO helps companies divert their resources to more critical business strategies. Often, companies find it impractical to hire a full-time position in-house because of the cost associated with doing so.

How does Business Process Outsourcing work?

When a business engages an external specialist to manage and operate some of its internal processes, it's referred to as business process outsourcing. Such ‘processes’ include customer service, accounting and finance, or sales. It is different from hiring an agency to do specific tasks, as the outsourcing provider (BPO) is more concerned with the ongoing production of labour-intensive tasks, instead of the higher-level strategy and guidance.

Now, business process outsourcing has broadened and is more akin to staff augmentation, or staff leasing.

What are the benefits of business process outsourcing?

There are many benefits to outsourcing, as well as some downsides and risks. The common benefits include:

Cost savings: significant savings of up to 70%, leveraging the lower global salaries Global market: access to a bigger employment pool of talent Global presence: having operational across the globe increases trade opportunities Flexible workforce: reduces internal local labour and employment compliance obligations Leverage skill: leveraging the skills of other specialist companies Focus: enables the client company to focus on their core functions

 

Business process outsourcing examples

The business process outsourcing sector is a vast industry, generating over $200bn annually, and employing many millions of people worldwide. Some examples include:

Big enterprise

Facebook and Uber outsource many of their operational functions, including content moderation for Facebook, and customer service for Uber

Medium-size businesses

A medium business with 50-500 staff might outsource the labour-intensive accounting and finance functions to a team in the Philippines.

Small business and entrepreneur

It is common for small business owners to have a Virtual Assistant (VA) working for hem full time, remotely from the Philippines.

What are the different types of BPO?

The type of business process outsourcing can be characterised by their specialisation, location, and size.

Generalist or specialist BPOs

Business process outsourcing is in the human resources and professional services sector. However, their services extend across all industries. The majority of BPOs are generalist, in that they offer a full range of professional services, although some specialise in certain verticals (ie accounting, or animation).

Location

Business process outsourcing typically operates form developing nations such as the Philippines, India, and Colombia. They typically have cheaper cost-of-living and bigger populations. Different locations offer different advantages.

Size of BPO

The bigger BPOs employ more than 250,000 people. They are huge, global operations. Medium-sized BPOs range from 500-5,000 staff and offer a full range of services. The smaller BPOs might have 1-500 people.

Functions of business process outsourcing

Collectively, business process outsourcing provides any kind of staffing solution. Common functions of BPO include:

Finance and accounting: operational, technical and specialist functions Healthcare: various functions of the backend of the healthcare and health-insurance industries Creative and content: everything from post-production of Hollywood movies to newspaper and website content Tech, IT and development: network management, web and app development and maintenance Sales & customer support: ongoing sales and customer operational support and delivery Marketing: ongoing marketing, communication and branding activities Talent and HR: externalising the management of company HR, recruitment and compliance Administration: general business administration and operational activities Business Process Outsourcing (BPO) services

Outsource Accelerator is the most trusted source for independent information & advisory for Business Process Outsourcing (BPO). We have over 4,000 articles, 200+ podcast episodes, and a comprehensive directory with 700+ BPOs… all designed to make it easier for clients to learn about, and engage with, business process outsourcing.

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