In today's fast-paced business world, companies face fierce competition and constant change. Many are moving operations overseas for cost savings and efficiency. This presentation examines offshoring, its benefits, and challenges. Let's explore further.
2. Offshoring as an
outsourcing strategy
In today's fast-paced business world,
companies face fierce competition
and constant change. Many are
moving operations overseas for cost
savings and efficiency. This
presentation examines offshoring, its
benefits, and challenges. Let's explore
further.
3. Offshoring and other
cost optimization
models
Offshoring is the strategy of moving business processes,
services or production from one country to another, usually
to reduce costs.
Unlike outsourcing, which is based on outsourcing specific tasks,
offshoring means transferring these tasks abroad. A characteristic
feature of offshoring is also the choice of neighboring countries,
often due to a similar culture and language.
4. Benefits
• Lower Labor Costs • Business Scalability
• Access to Skilled Workforce
Moving some of its business
operations abroad gives a company
the chance to acquire qualified
employees.
In many countries, labor
costs are much lower than in
developed countries.
Offshoring enables companies to
increase business scalability by
accessing more employees and
infrastructure overseas.
5. Challenges and Risks of
Offshoring
Language and Cultural Barrier:
Service quality risk:
Loss of Process Control:
Moving business operations abroad can create communication and culture
difficulties between employees from different countries.
Offshoring can lead to quality of service issues, so companies need
to closely monitor processes and services to ensure that they are
performed at the expected level.
Moving some operations abroad may result in a loss of
control over these processes.
6. Customer service outsourcing is commonly done in countries with
lower labor costs and English-proficient employees for better
communication.
IT offshoring to countries like India and the Philippines with skilled IT
professionals and competitive labor costs.
Accounting and finance are often offshored to nations with
robust tax and legal systems, streamlining these functions.
What services are
worth outsourcing
abroad?
7. • Company Experience
Partner's offshore expertise and industry understanding are crucial.
• References
A strong partner should provide testimonials from satisfied clients.
• Technical Skills
Partner must possess necessary technical expertise for task fulfillment.
• Employee Qualifications
Partner's staff should possess the required qualifications and experience.
• Culture and Language
Partner should grasp the local culture and language for effective communication.
• Price
Competitive and profitable offshoring pricing is vital for the client's business.
A key factor in
choosing a
nearshoring partner
8. Summary and conclusions
In summary, offshoring offers cost-efficiency,
scalability, access to skills, and innovation.
Challenges include language, culture, and process
control. Careful analysis and partner selection are
essential. The right partner and strategy can
enable global expansion and enhance
competitiveness.
