There has been a lot of talk about the pros and cons of Offshoring and Outsourcing. This is because of the fact that you can actually get bigger profits while saving a lot of money in the process. Offshore call centers have already proven that. Such strategy enabled companies in the US to save millions and give jobs to economically challenged countries therefore reducing dependency to US financial aid. It is a win-win situation for both parties and here we're going to break down the good things about offshoring and outsourcing into 3 points:
1. Lower priced goods and services - cheaper cost of production means lower priced goods and services. If the client company is able to save $20,000 on production cost, the product can be readily made available at a lower price. Lower price for a commodity means the people have greater purchasing power thus the number of products that gets into the hands of consumers tends to get bigger. Profit is earned at a lower cost. That is what's important in any business venture. Offshoring and outsourcing makes that seemingly simple business logic (but so hard to fulfill sometimes) definitely possible. Let us take for example customer service or tech support: In the US, you can save up to 50% cost by hiring a Filipino college graduate as compared to an American tech support employee who probably has lower education qualifications than his Filipino counterpart. Saving cost and giving out jobs to places where it matters is one of the plus sides of offshoring services. In short, it's getting higher quality workers and at the same time, cutting back on cost. These two ideas seem far from each other especially when talking about basic marketing principles but this is entirely made possible by offshoring and outsourcing.
2. More sophisticated jobs - Outsourcing jobs will move less important jobs out of the client company therefore creating new sophisticated ones. This will require higher qualifications thus pushing the country to educate its citizens more and focus on improving the quality of their own employees. Doing call center jobs for example, requires patience and the ability to get your point and message across without resulting to an irate customer, now if these jobs are offshored and outsourced, then future employees will have more challenging and fulfilling jobs waiting for them. The focus now would be on improving more skills and creating higher quality employees. The effect will reach farther than the scope of the company and would prove to be beneficial on a wider scale.
3. Focus on core functions - In business functions, depending on the nature of the business, what's usually the unnecessary added worry is the Customer Service part of the business function. If we outsource this, we reduce added risk and worry and can focus on more important aspects such as Research and Development, Production/Operations, Finance and Administration/IT. Most client companies employ customer support employees from other countries to reduce the cost and then give more funds to Research or Marketing. This is a wise and logical move that delivers better results at a lower cost.
In offshoring and outsourcing, good things just keep coming. What's amazing about this is that you not only get to cut your costs but you are also able to provide jobs for developing countries while raising work standards in your own company. Results are seen through lower priced goods and services, refined job opportunities and development of your company's core functions.
Kristel Nicole Eniego is part of VONCORE's creative writing team. If you want to learn more about the offshore outsourcing business viewed with expertise and related in an easy to digest manner, visit Voncore Global Workforce Solutions
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