What are reasons for global outsourcing, or offshoring, to a foreign supplier?

Let’s face it - global outsourcing still has a negative connotation associated with it. Even though companies have been contracting work to others for several decades. Yet, some organizations continue to believe that the outsourcing process itself is too complicated, the quality of global talent isn’t up to snuff, or that the ROI doesn’t justify the effort. 

Those who’ve taken advantage of these opportunities know better. 

The truth is, globalized outsourcing is a fantastic way to reduce operating costs, boost productivity, and enhance brand offerings and deliverables. Not to mention that implementing these types of programs is now easier than ever before. Innovations in communication/collaboration have made realizing the advantages of an international workforce incredibly simple and worthwhile. 

Today’s article takes a deep-dive into the subject - explaining how global outsourcing benefits both parties and is shaping the future of work for many common industries.

Outsourcing vs Offshoring - What’s the Difference?

‍

Before we get into the benefits of utilizing outsourced talent, it helps to first define exactly what we mean. Many times, the terms “outsourcing” and “offshoring” are used interchangeably to describe these competing services. Yet, there are considerable differences between the two.

For starters, outsourcing describes when a third party is used to produce or perform a service normally managed by internal parties. Common examples of outsourcing include call center operations, HR management (benefits administration, payroll, etc.), or providing technical support. In each case, these services could be performed in-house, but are instead offloaded to reduce costs, improve service, or enhance capabilities. 

Although most people associate outsourcing with foreign entities, this type of work contracting happens domestically as well. Consider ride-sharing services like Uber or Lyft, meal-delivery options for local restaurants, or even using temp agency talent to fill vacant front-office positions. All of which are U.S.-based outsourcing examples.

Granted, the majority of outsourcing takes place on foreign soil, but not all. 

Offshoring, on the other hand, is an entirely separate business model. In this scenario, domestic companies willingly choose to move or expand their operations to other parts of the world. Think of auto manufacturers like GM who open assembly plants in Mexico or Canada. 

Although the work is performed by foreigners, it remains under the immediate direction and guidance of a domestic brand. Typically, companies use offshoring due to reduced labor or operating costs or better access to raw materials. 

For the purpose of today’s article, we’ll focus on outsourcing in the traditional sense. Meaning, those instances involving foreign labor and/or processing for domestic organizations. 

‍

What are The Benefits of Global Outsourcing?

Now that we’ve gotten those formalities out of the way, let’s talk about exactly how outsourcing can add value to your organization. There are several different areas to cover, but we’ll start off with one of the biggest and most popular - cost savings. 

Offshore Talent is Affordable

Companies generally choose to outsource because the production of goods or services is so much more affordable vs. using domestic resources. The main reason for this disparity is the cost of the labor itself. Many foreign countries have a lower standard of living and thus the average employee makes less than they would in the U.S. while performing similar tasks.

This isn’t meant to be a slight against foreign countries - it’s simply an economic fact of doing business in a global economy. Since the cost of living is cheaper in these areas, most residents are happy (or at least accustomed to) the going labor rates for that particular market.

With outsourcing, many of the same workers actually earn higher wages as freelancers than they would working for their local employers.

This setup creates a win-win environment as domestic brands reduce operating costs while helping the global talent they hire to earn a better income.  

Outsourcing helps companies do business at a fraction of the normal cost. All while receiving the same high-quality results and predictable outcomes they’re used to. 

Less Expensive Doesn’t Mean Lower Quality

A common misconception of outsourcing is assuming contracted talent is not as qualified as in-house employees. In most cases, nothing could be further from the truth.  Many workers hired and managed by business process outsourcing providers are some of the best and brightest minds in their industries.

Contrary to popular belief, these contracted professionals have the same advanced degrees and certifications as domestic workers. Many are well-versed in sales, recruiting, and insurance operations and thrive in complex industries like insurance and IT. 

However, because of the economic conditions of their home countries - or because they want more freedom and flexibility in their careers - choose to work with dedicated outsourcing providers. In doing so, they lend their talents to support other businesses and brands around the world.

These seasoned experts are more than capable of performing complex technical assignments or managing administrative tasks while still yielding high-quality results. The only difference is that - because of the reduced cost of living in other areas - they’re able to offer these services at significantly reduced rates (as compared to using in-house talent). 

The outsourcing model reduces expenses by eliminating the need to hire or train new employees and/or the support staff (HR, admin, etc.) that go along with them. 

Outsourcing vendors manage all the logistics so businesses can focus on getting what they need finished. Organizations can submit assignments online, provide detailed instructions of exactly what needs to be done, and then sit back, relax, and wait for the results to appear in their inbox.

Business process outsourcing (BPO) providers allow companies to quickly add talent without having to deal with the pain of hiring, housing, or adding new employees to the payroll. Best of all, these services are managed under one roof for a single flat rate. 

Bottom line - outsourcing provides access to a talented global workforce that is confident and capable enough to take on any challenge they are assigned. 

And combined with a dedicated BPO vendor, organizations can enjoy all the benefits of hiring these talented professionals without the added frustration or additional overhead of doing it all themselves.

Outsourcing Boosts Productivity

Yet another advantage of using outsourced talent is how easy it is to scale business output. Whenever new projects pop up - or brands experience a sudden surge in demand - outsourcing can provide the coverage needed to keep pace. 

Having a large pool of “on-demand” talent means companies can rapidly scale their workforce without the need to hire additional full-time employees. 

Once the rush is over, organizations can decide whether or not to keep this additional talent for future projects or release these workers outright with no strings attached. Should the need for additional help surface again in the future, the same rules apply. This global talent pool can be tapped into as often as needed to keep operations running smoothly.

Outsourcing yields a highly efficient, dependable workforce available when you need it.  

Around-the-Clock Output

Here’s another advantage of outsourcing that some brands never even consider. Because many of these professionals are in alternate time zones, extended hours becomes an option businesses can take advantage of.  

For most domestic brands, the workday typically ends at 5 pm and employees go home for the day afterward. Productivity then grinds to a halt as little (or nothing) gets done during the overnight hours. 

Yet, it’s the opposite with outsourcing.

By implementing a global workforce, productivity doesn't have to end once the parking lot empties out. Outsourced talent can begin tackling new (or remaining) assignments overnight long after employees have left the office. Frequently outsourced tasks include running reports, updating records and databases, and completing other critical business assignments that may be repetitive, yet are essential for accelerating growth. 

Once employees arrive the next morning, they can hit the ground running without having to play catchup from the previous day. Outsourcing to other parts of the world means your business runs 24/7- even when your operating hours are from 9 to 5.

‍

Automation - The Ultimate Outsourcing Companion

While the benefits of outsourcing are easy to appreciate, there are ways to make it even better. One of which is using Business Process Automation (BPA) to reduce manual labor and accelerate output results. BPA is a great option to consider when it comes to offloading simple, repetitive tasks that employees are too busy to complete or don't have any interest in doing.

Automation uses a specialized form of AI (Artificial Intelligence) to bring assignments back in-house, but without the need for additional employee labor or assistance. The main branch of his technology is known as RPA or Robotic Process Automation. However, there are no actual robots involved - only software code that resides on user computers or company assigned servers. 

These “bots” listen to and capture keystroke events and then repeat them as often as needed. In other words, once the system is properly configured - and employees record what events need to be duplicated - the software takes over from there. The code then replicates these transactions indefinitely at a pace much faster than humans can do on their own. 

RPA solutions allow organizations to easily scale operations as their needs grow. All without the hassle of adding additional staff or investing in major infrastructure updates.  

This type of solution works best for simple, well-documented processes having clearly defined inputs and outputs and little variance. Bots can’t actually “think” for themselves, so tasks requiring creativity, critical thinking, or lack structure are still best reserved for humans. However, the significant time and cost savings from eliminating tons of repetitive work make RPA worth considering.  

Robotic automation is designed to manage front-end work with existing employees stepping in to finalize the project. This type of human-machine collaboration is optimal for improving efficiency and generating a better ROI on every outsourcing dollar spent. 

Working with an experienced outsourcing company like Invisible Technologies makes implementing hybrid productivity solutions a snap. Our unique approach to task management harnesses the best of modern technology without losing the all-important human touch.

Outsourcing Better Utilizes Existing Talent

Saving time and money usually garner all the attention, but there’s another hidden gem associated with outsourcing. One of the main appeals of using contracted workers is the new opportunities created for existing employees. Not only to improve morale but to promote creativity and enhance their overall value to the organization.

Each minor/repetitive task that can be offloaded (or done away with) allows in-house talent to do more. They recover time and develop opportunities to work on the types of high-value assignments you hired them for in the first place. Projects that better leverage their skill sets, knowledge, and abilities and truly generate results. 

Simply put:

‍Outsourcing makes better use of existing talent and helps employers get the most out of their current workforce. 

Not to mention that employees are generally happier and remain more engaged when given assignments that match their interests and goals. A happy workforce is a productive workforce and outsourcing can nurture this goal. 

When properly implemented, outsourcing can have a major impact on long-term growth. Employees win by doing the type of work they love and organization's succeed by getting the most out of each and every employee.

‍

Global Outsourcing - The Shortcut to Building a Better Brand

Organizations do business nowadays on a global scale as part of an international economy. Competition is fierce and the key to maximizing value is getting the most out of every opportunity. Businesses must take advantage of areas they can leverage to improve efficiency and reduce costs. 

Working with an experienced outsourcing provider is a smart way to overcome productivity challenges, streamline operations, and add additional resources that may be lacking in-house. Industry leaders like Invisible make it easy to get started with business process outsourcing or robotic process automation.

Our skilled team can get you up and running fast while providing the support needed throughout every phase of the journey. Invisible’s personnel network includes a global workforce filled with many talented individuals who possess strong technical, educational, and business backgrounds. 

Each contractor is vetted ahead of time and supervised throughout the course of their work. They bring ready-made skills to the table allowing you to focus solely on the work you need to get done. 

You avoid hiring or training additional employees and those you do have on-staff can focus on higher-ROI assignments. Matching employee tasks with their interests and abilities increases happiness/engagement and makes for better use of company talent.

With outsourcing, companies can lower costs, improve morale, and boost efficiency quickly and easily. And with on-demand talent pools, organizations can rapidly scale their workforce to meet the fluctuating demands of their business. 

If you’ve ever thought about giving outsourcing a try, there’s never been a better time to get started. Companies can begin with a few test assignments to get buy-in from the team and ensure they’re comfortable with the process. From there, your Invisible success manager can assist you in quickly scaling your program to the exact size you need.

Invisible offers multiple package plans based on common use case scenarios but also designs customized solutions based on each unique brand requirement. Contact us today and one of our dedicated business reps will work with you to explain the entire process and help you get underway 

There are no long-term contracts to sign, no hidden fees, and you can cancel anytime. With so many incredible benefits to take advantage of, why wouldn't you give global outsourcing a try?

Your competitors are already leveraging outsourced talent to get ahead - don't wait and get left behind. Get started by signing up for a free account, and someone on our sales team will reach out to you with more information.

Which of the following is an advantage of offshore outsourcing?

What is the global strategy in which a firm allows a foreign company to produce its product in exchange for a fee?

Which of the following is a benefit to the United States of offshoring?

What is the difference between outsourcing and offshoring quizlet?