Offshoring and outsourcing are two terms usually used in conjunction. Don’t mistake one for the other as these two are different concepts, and that difference is simple. Many companies perform outsourcing every day. Outsourcing is where selected business functions are taken and relegated to an independent organization. Offshoring, on the other hand, is the shipment of jobs overseas.
Here’s a more in-depth look at these concepts.
What is Outsourcing?
Outsourcing means contracting out business projects, activities or functions to an external provider. The term was coined in the ‘80s, during a time when companies were growing and required employees to be specialized or have a wider skill set. These companies discovered that external vendors or providers were able to accomplish the job faster and more efficiently because of their skills and resources. Outsourcing business processes has been growing at a fast rate since then.
Outsourcing comes in different forms. For instance, if you have a company and don’t want to include the janitors in the regular payroll, you hire a cleaning service.
The external contractor doesn’t have to be based in a developing country, either. Some US automakers, for example, use car parts manufactured in Japan. There are even car models that are assembled overseas.
By the end of the twentieth century, due to the advancement of the Internet, wireless technology, telecommunications and the shipping industry, employing external firms from developing countries (where wages are lower) increasingly became an efficient and economical solution.
This practice of setting up operations in foreign countries became known as offshoring.
What is Offshoring?
Offshoring is the relocation of a business function to another country. This function may be a company’s:
- productions
- business services
- distribution
- research
- development
- core activities
In the 1990s, China started becoming a premier destination for production offshoring, and after technological and telecommunication improvements, India became the country for service offshoring.
Offshore Outsourcing
Unlike offshoring, where the functions sent to a foreign country are performed by a foreign subsidiary, offshore outsourcing means hiring an independent organization to complete the work. As the name suggests, it’s a combination of offshoring and outsourcing.
In the United Kingdom and the United States, the sectors that commonly apply offshore outsourcing are the customer service and IT industries.
Benefits of Offshoring
By sending off work to another country other than where the company’s products or services are offered, especially countries with low wages, capital expenditures can be converted into operational costs, and this can enhance different financial measurements.Offshore companies can help cut down expenses such as labor and maintenance costs, and the overall time frame for production process.
Information technology segments of companies (help desk, Internet promotion and computer support) are the most commonly offshored business functions. Companies would pay significantly less if they offshored IT operations instead of hiring professional in-house IT personnel that deliver the same level of expertise.
Other offshoring benefits are:
1. Companies will be able to offer their services and products at a reduced rate but will still earn healthy profits.
2. Due to the cheaper prices, consumers can save money, and companies will experience an increase in their economy.
3. Offering and purchasing cheaper services and products can help restore an economy.
4. Expanding global reach can expose a company to a wider talent pool and lead the way to utilizing new capabilities, skills and strategies.
5. Resources that aren’t available internally can be accessed.
6. When a company outsources or offshores core activities, it can dedicate more time for value-added activities and core competencies.
7. The technical operations and help desk departments of most organizations tend to become decentralized in the long run. Outsourcers and offshorershave the ability to merge these functions, and as a result, there’s greater control over resources.
8. Offshored processes like information technology, customer service, software development and accounting will be handled by specialists. Offshoring can therefore pave the way to a more customer-centered, mature organization. Companies can learn and apply the offshored department or offshoring company’s best practices, and thus accelerate business maturity.
9. By delegating tasks to an external contractor, businesses can wash their hands off duties and responsibilities that are too hard to handle, but at the same time, take advantage of the offshoring company’s work.
The World’s Most Popular Offshoring Destinations
Offshore destinations are found all around the world. The top countries include:
- India
- Philippines
- Mexico
- Ukraine
- Bolivia
- Brazil
- Argentina
- Indonesia
- China
- Russia
- Pakistan
- Panama
- Nepal
- Bangladesh
- Bulgaria
- Belarus
- Romania
- Egypt
- Malaysia
- Mauritius
- Republic of Macedonia
Tholon, a leading technology investment and research company, compiled the top 100 offshore outsourcing destinations for 2012. The list included a number of cities in India and South America. Several Southeast Asian regions also made it to the list, which led to Tholon concluding that countries in Southeast Asia, specifically the Philippines, remain as a dominant player in the world’s offshore outsourcing industry.
In 2011, the Philippine IT-BPO (information technology-business process outsourcing) industry generated a minimum of $11 billion, which is 20% higher than the previous year.
Enter Cervad
Cervad is made of a network of professionals in marketing and management as well as web design, telemarketing, content writing, CRM and SEO. Looking for an offshoring company that offers the whole gamut of IT and market development services?
To execute these plans according to your needs and requirements, Cervad will:
- build sophisticated business plans
- utilize efficient strategies
- employ a team of experienced and skilled professionals
One of the best things about working with Cervad is that it has offshored its strong HR and IT support departments to the highly commended, globally competitive country that is the Philippines.
Offshoring to the Philippines has completely revolutionized the IT industry as the country continues to deliver unparalleled results while allowing organizations to save immense amounts of time and money.
The IT and marketing functions of businesses will be carried out by well-trained, seasoned professionals, so you can take advantage of the same level of expertise of an in-house expert but pay a fraction of the price. Plus, you’ll open your doors to a broad range of skills and resources. That’s a win-win for your company!
What Services Do We Offer?
Cervad is dedicated to offering the entire spectrum of IT services with passion. Tailoring our services to your business needs is also our priority. Here’s a list of our innovative, strategic solutions.
1. Remote IT Services
Your company’s IT responsibilities should help you grow instead of waste your time. If mishandled, your business’ computer support and help desk departments could end up unproductive for your company as well as your customers.
Thanks to developments in telecommunication and the Internet, we can provide technical support to your customers, and proactively monitor and maintain your system 24/7 with our remote software applications and tools.
2. Website Development, Design and Maintenance
Building a strong online presence doesn’t end with having a website. Realize your full online promotion potential with a captivating and user-friendly design that will encourage readers to explore your site and offerings.
Our team of graphic designers and website development specialists ensure every project is visually appealing and easy to navigate, and at the same time, perfectly represents your business image.
No website design and development project is too big or too small. We cover any niche. Get the superior quality web design service you truly deserve with Cervad.
3. Search Engine Optimization
Maximizing your website’s organic traffic involves leveraging the power of search engines. If you’re not listed high in the search engines, you’re allowing your competitors to make more money.
To increase your website traffic to huge proportions, the most effective way is to utilize carefully thought out search engine optimization strategies and accurate, well-designed SEO tools.
Cervad uses a clever, potent combination of off-page and on-page approaches. On-page SEO is vital for any Internet marketing campaign because it’s the foundation of any website. Relevant, unique and intelligently written content that has all your pertinent keywords is a key element in on-page SEO.
Off-page SEO is just as important. We never overlook a website’s internal and external linking structure. By strategically pointing links back to your website and leaving links in all the right places, it’s only a matter of time before you can reach great improvement in your search engine positioning and site traffic.
4. Pay Per Click Advertising
This is one online marketing strategy that lets you target Internet users actively searching the Web for your services or products. The best part is that you only pay when someone actually clicks on your ad. These ads show up on search engine results pages and on websites with content related to your business.
While PPC advertising is one of the most effective methods you can use, it could cost you dearly if not properly managed, but don’t bother worrying about that because Cervad has your back.
5. Social Media Management
Building and constantly updating your social channels is one of the best ways to reach potential customers and service existing ones. Whether your customers are concentrated in your local area or around the world, engaging with your community is paramount in today’s competitive business landscape.
Our social media marketing service include enhancing social networks like Facebook, Twitter, LinkedIn, MySpace, Flickr andGoogle+.
6. Contact Center Solutions
Cervad can handle both inbound and outbound calls. For your customers to have a delightful experience, we hire only professional, well-trained contact center representatives to address your customer’s concerns, issues and queries. Our telemarketing services include:
- Product support
- Lead generation
- Market development
- Customer care and support
- Help desk and technical support
- Collections/Payment processing
