Many companies are well aware of the benefits of outsourcing certain services such as manufacturing, customer service, web hosting, and software development. They include cost reduction, the ability to quickly ramp certain functions up or down, and allowing in-house staff to focus on core tasks.
Once a business decides to outsource, however, it must also decide where to find the outsourcing vendor. Options include within the same country, in a country nearby, or a country overseas. The latter is known as offshoring. Any business that uses offshoring services is likely enjoying the fruits of the benefits mentioned above.
Some business trends are shifting the considerations for companies thinking about offshoring. Here we look at the changes taking place and how they might impact businesses.
Growing Need for Strict Data Security
The unrelenting nature of cybercrime puts data security front and center for every company across many industries. Businesses that work together can expose each other to the dangers of weak cybersecurity measures. That’s why companies that use offshore services are becoming more demanding about the data security practices within those providers.
Hiring companies are demanding that their vendors have strict cybersecurity practices in place, including firewalls, robust authentication procedures, and secure online communication.
Recognized Benefits of Nearshoring
While there are significant benefits in offshoring, nearshoring can offer many of those same advantages without some of the associated problems. For example, outsourcing tasks to a provider in a country in a nearby time zone can bring your company the same flexibility and cost-cutting while enabling you to share working hours.
Other benefits of nearshoring include the ability to easily travel between sites for meetings, the chance of a language and culture match, and the likelihood that provider employees you want to hire permanently will be willing to make the move. For these reasons, and because nearshoring enables greater responsiveness to customer demands, the practice is a useful option for some companies.
Role of Reshoring
While some companies are bringing outsourced work closer to home with nearshoring, others are bringing it even closer with reshoring. Businesses may switch from providers in other countries to those on their own for a variety of reasons, including strengthening the local or national economy and taking advantage of local technology expertise. In some cases, rising vendor rates may make outsourcing within the same country more cost-effective.
In addition, technology itself has made it possible for some companies to affordably perform functions in-house or locally that were prohibitively expensive in the past. For example, 3D printers can take over some functions that people used to do.
Logistics Access for SMBs
Small and medium businesses (SMBs) that need to ship their products internationally are also gaining benefits from technology. Smaller tech-enabled shipping companies are giving SMBs access to platforms that make it easy to get quotes, book, and complete shipments, provide documentation, and pay for transactions in ways these smaller companies haven’t been able to do in the past.
These shipping providers now offer services to smaller businesses around the world with products that have the potential to reach a global market.
IT Worker Shortage
As technology continues to dominate operations within a variety of companies, the need for IT assistance is growing to a point where it can be hard to find reliable support. When companies seek to take advantage of things like artificial intelligence (AI), robotic process automation (RPA), blockchain, and the Internet of Things (IoT), they’re looking to other countries to provide talent to fill the void.
Fortunately, there are many places that offer IT outsourcing services to choose from, including Latin America, Eastern Europe, and Asia and the Middle East. The U.S. can be a source of offshoring as well. Though its IT outsourcing agencies are known to be some of the costliest in the world, the professionals that work within them are recognized as some of the best.
Rising Importance of Customer-Centrism
Savvy companies know that putting the customer first is no longer a gimmick or a strategy but something that must be the foundation of every decision. Businesses that miss the memo on this one fall behind their competitors who offer the attention and resources that today’s customers demand.
A big part of this approach is customer care, in which technology continues to play a larger role. Companies that want to remain up to date without having to invest in quickly-changing technology are offshoring to providers who have the tools to ensure no customer falls through the cracks. Those providers offer the personalized mobile, chat, self-service, IVR, and omnichannel experiences customers are looking for.
Offshoring has always been a way for companies to save money and gain dedicated professionals to perform various business functions. Those conditions haven’t changed but the way they play out is different now than it has been in years past. Trends in logistics, customer care, IT, and other areas are shifting the way businesses approach offshoring today.
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