Business Process Outsourcing (BPO) companies can be structured differently. One possible differentiation depends on the BPO provider’s location. There are three most common practices: Onshore outsourcing or Domestic BPO, Nearshore outsourcing, and Offshore outsourcing. In this guide, we’ll learn more about these types of BPO partners and dig deeper into Offshore outsourcing advantages and benefits.
Domestic outsourcing is exactly as it sounds: the act of outsourcing and receiving services within the borders of the country a company is located in. To put it another way, a BPO vendor from one city, state, or region can be hired to supply outsourcing services to a company in another city, state, or region within the same country. Various circumstances might cause domestic outsourcing, including, but not limited to, the availability of specialist talents in specific areas or regional frictions in rates and expenses, as well as the company’s culture, and skill requirements.
Contracting outsourcing vendors’ services between neighboring countries, or geographically close countries, is known as nearshore business process outsourcing. For example, this might includes Canada, Mexico, or Central America, for US-based companies. Nearshore outsourcing as a form of outsourcing most often happens when companies need specialized skills at lower costs, but specific criteria, such as timezones and language proficiency, must be considered. One example of nearshore outsourcing can be when a Silicon Valley company outsources some services to software specialists from Mexico.
What is Offshore BPO?
Offshore outsourcing is the third example of outsourcing business customer operations and other company activities. When a company hires a third-party supplier to run some of the operations from an outside country (most often overseas), it is known as offshore outsourcing. To put it plainly, this means getting the work done by a team in a different, further, and not neighboring county. Available resources, political structure and stability, lower labor costs, tax reductions, and other factors encourage companies to outsource offshore.
Companies often decide to outsource to take advantage of the immense talent pool and specialized skills, labor flexibility, and cost-efficiency. Well, the benefits of offshore outsourcing are even more significant. In the case of offshore outsourcing, the talent pool is global, and because of this, the work gets done faster. So, one of the benefits is speed and efficiency. Also, the availability of specially qualified and skilled people is broader because of this globalization. And that’s the second benefit, a large talent pool of professional, experienced, and motivated workforce. Another quite significant benefit is cost-efficiency. The costs for the services are usually much, much lower. The cost of living and labor in developing or underdeveloped countries is much lower. Also, some countries offer tax reductions and lower administrative expenses.
For the company in need of those outsourcing services, this ultimately saves money and means lower end-user product or service prices.
While many companies need outsourcing services, offshore outsourcing seems to be the most beneficial and the right choice for companies that don’t need to have all operations done in the same timezone.
Offshore outsourcing is highly cost-effective due to lower living and labor costs, tax reductions, and lower administrative expenses, especially in developing or underdeveloped countries.
Also, hiring an offshore BPO will provide you access to a global talent pool, with high availability of specially qualified, skilled, and motivated people who operate fast and efficiently. FrontLogix is an offshore outsourcing provider that offers Exceptional 24/7 Customer Experience, Customer Success Management, Sales generation and support, Billing and Software Technical support, and various Digital and Back-office services.