5 Reasons Why Companies take to Offshore Outsourcing

5 Reasons Why Companies take to Offshore Outsourcing


A company can outsource work to anywhere in the world. Offshoring is different because in this case the work is always moved overseas.

1. Cost

The main reason for offshoring is that the cost of producing goods is often much not expensive overseas. The cost of materials most of the time cheaper, and the cost of labor will practically be lower. It is often commenced to save costs and provide a buffer capital fund to companies that could be leveraged in a manner that best profits the company.

Offshoring work has been credited with being one of the main reasons why the cost of goods such as clothing and technology has fallen so much in recent years. The savings that are made by companies can be passed on to customers in the form of lower pricing and if customers are able to buy more, then this stimulates the economy.

2. Restrictive Regulation

One other concern that companies must deal with are restrictive local regulations that hinder them from reaching long term business goals. Staying updated with local laws is vital for any business to operate continuously, but these regulations unintentionally cause added costs on operational expenses that later leads to reducing competitiveness.

3. To Stay Competitive

         In this interconnected world, businesses are now competing in a global stage wherein innovation is becoming a significant factor in determining the success of a company. The constant demand for efficient customer service makes it more challenging for companies across different industries to stay relevant. For a business to stay competitive, it needs to increase efficiency, enhance operational procedures, and innovate on delivering quality service to their customers. Offshoring allows companies to offer highly valued services such as 24/7 customer support and provide effective service level tasks with flexible work schedules.

4. Access to Experienced Professionals

When you outsource services, you are not employing fresh graduates. Third party outsourcing companies are manned by people who have accumulated a wealth of experience across diverse industries.  Outsourcing and offshoring also enable companies to tap in and leverage a global knowledge base, having access to world class capabilities. While cost savings remain a priority when outsourcing, more companies are looking to capitalize on the availability of talent.

5. Opens the Door to New Market

Some companies also outsource to help them develop and secure access to new market areas, by taking the point of production or service delivery closer to their end users. Offshoring can also open new markets to the business in the country that is carrying out work for them. If products are made in another country, then it makes sense to sell them there as well. There is the capability for these markets to become quite beneficial for businesses that can be one of the first to get their products out there. It also provides people in third world countries with a chance to earn money which in turn will boost their economy as well.