What is offshoring?

‍Offshoring in this context is an act of outsourcing some business processes/operations from one country to another country. Usually, it is the shifting of activities that can be done at a lesser expense or with better productivity in another geographical location. Tasks offshored include production, IT services, call centres, and back office work.

Many business ventures from the UK outsource to countries where labour is cheaper or where they can obtain competent personnel in certain fields. This core objective is to utilise these advantages to enhance business efficiency and competitiveness.

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‍Why should a business offshore not outsource?

Offshoring is related to outsourcing but the latter entails contracting out work to other companies, while offshoring focuses on moving it to other countries; there are several reasons why offshoring is more beneficial for several reasons.

Outsourcing, which is the process of moving operations to another country, usually within the same firm or affiliated company, is more central and conductive. This is deliberate to ensure that the company’s standards and practices are well upheld since the offshore teams are directly managed by the firm.

Also, offshoring is characterised by fewer expenses in terms of labour and operations since they are carried out in other countries. It also makes it possible for companies to form dedicated offshore teams that are of varying competencies and specialised in providing services in relation to the company’s goals thus improving on the end product.

Also, offshoring creates a better-connected approach to organisational processes, improving the exchanges and cooperation between various units. Such integration results in synchronised business procedures and techniques to be applied in the business.

Offshoring also provides tactical flexibility, meaning the ability to expand the company’s activity at a fast pace and promptly respond to shifts in the market. All this flexibility is vital given the dynamic business world that companies must deal with at the moment.

Thus, even though both offshoring and outsourcing have their advantages, offshoring is more effective and would continue to provide high benefits for those companies that need to cut their costs and procure higher quality and reliability of service with sustained increases in efficiency as primary objectives.

Advantages of offshoring

A lot can be gained by UK-based companies regarding offshoring. Offshoring the operations or some processes for products to countries which have cheap labourers has remarkable effects on the firm’s costs.

With global talent acquisition, an organisation can tap into skills, knowledge and experience that are not readily available locally thereby strengthening the innovation capacity of businesses.

Furthermore, through offshoring one can find new partners, new customers, new markets, and ensure the growth of the business and the increase of market share. Offshore management is dependent on the usage of resources as well as flexibility as a key approach to the management of a business within the current global economy.

In today's fast-paced global economy, businesses are constantly seeking ways to stay ahead of the business curve and maintain their competitive edge. One strategy that has gained significant traction in recent years is offshoring – the practice of relocating business operations or processes to foreign countries.

But what exactly are the advantages of offshoring, and how can they benefit your business? Here are a few of them:

1. Cost savings

Offshoring allows companies to access lower labour costs in offshore locations, reducing operational expenses and increasing cost competitiveness in the global market. The benefits of cost savings through offshoring extend far beyond simple expense reduction.

By reallocating resources to more cost-effective locations, companies can allocate capital towards innovation, expansion, and strategic initiatives, driving long-term growth and sustainability.

Overall, offshoring provides UK companies with:

• Lower labour costs

• Reduced overhead expenses

• Economies of scale

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2. Access to the talent pool

Offshoring enables companies to tap into a broader talent pool with specialised skills that may be scarce or expensive domestically, fostering innovation and enhancing the quality of products and services.

Offshoring empowers businesses to build dynamic and resilient teams that are well-equipped to navigate the complexities of today's global economy. By harnessing the power of a diverse and skilled talent pool, companies can unlock new opportunities for innovation, drive sustainable growth, and stay ahead of the competition.

This in turn allows UK companies to unlock:

• Availability of specialised skills

• Diversity of expertise

• Potential for innovation and creativity

3. Time zone advantage

Offshoring allows for round-the-clock support and service coverage, enhancing customer satisfaction and responsiveness to market demands. The time zone advantage offered by offshoring empowers companies to operate more efficiently, enhance customer service, and drive business growth in today's interconnected global marketplace.  

By leveraging time zone differences strategically, businesses can stay ahead of the competition and capitalize on opportunities around the clock.

UK companies can benefit from:

• 24/7 operations

• Faster turnaround times

• Improved efficiency and productivity

4. Flexibility and scalability

Offshoring offers businesses the flexibility to adjust resources and scale operations according to fluctuating market demands and business requirements. Moreover, by leveraging offshore resources and infrastructure, companies can quickly adapt to changing market conditions, seize new opportunities, and effectively manage operational costs.

With all considered, UK companies can:

• Ability to scale operations up or down

• Adaptability to market changes

• Enhanced agility and responsiveness

5. Risk diversification

By spreading business operations across multiple geographic locations, companies can mitigate the impact of potential risks such as geopolitical instability, natural disasters, regulatory changes, and economic fluctuations.

Diversifying operations globally reduces dependency on any single market or location, enhancing resilience and safeguarding business continuity.

This allows UK companies to quickly:

• Spread risk across multiple locations

• Hedge against geopolitical instability

• Ensure business continuity

6. Rise in emphasis on central business processes

Offshoring offers organisations the most effective way to outsource non-central tasks in a bid to enable them to focus on their main business strategies. Thus, they create the stimulus for the development of innovations, improving the quality of services, and strengthening leadership in the market.

The strategic emphasis on the organisation’s crucial business processes results in increased organisational productivity and sustainable development.

UK companies can benefit from:

• Enhanced innovation and creativity

• Improved service delivery

• Stronger competitive position

Calculate how much will you save when you offshore with our cost of an employee calculator. ‍

7. 24/7 operations

Offshoring guarantees an around-the-clock offer from UK companies providing customer support and operations. As the operations of businesses are spread across regions which are in different time zones, they are always available to help and operate round the clock which can make a drastic improvement in customer satisfaction and loyalty.

UK companies can benefit from:

• Continuous customer support

• Increased operational efficiency

• Higher customer satisfaction
  
  

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Offshoring is advantageous to businesses because the firms can cut costs, acquire talented employees, and increase productivity within the global market. These advantages assist businesses in providing better-related goods and services in the market at cheaper prices than the rival companies.

UK companies can benefit from:

• Review its strategic goals in terms of cost-saving and resource utilisation.

• Different specialists and gaining their experience and knowledge.

• Greater market position and market growth possibilities
  

In conclusion, there are hardly any disadvantages to offshoring your work to a country like India. The advantages and benefits of outsourcing are limitless, some of them are 24/7 Operations, Risk Mitigation, Market Expansion, Reduced Overheads, Improved Productivity and many more.

Read our blog on offshore vs outsourcing to understand better which is best for your business.  

Ready to hire remote employees or build your remote team? Connect with Jon today and start offshoring.