Offshore outsourcing involves giving an external company the mandate to perform business activities on behalf of the company in another country apart from the one where the products or services are manufactured. The main reason behind offshore outsourcing by companies is the need to save on operational costs, labor costs, and administrative costs, as well as to improve productivity, not to mention the possibility of obtaining quality work. The number one factor behind the success of outsourcing is the availability of electronic internet that allows fast transmission, access and delivery of electronic data globally.
With Offshore outsourcing:
• Companies can cut costs due to the difference in wages in different countries
• Worker enjoy quality and high information
• Work can be transmitted fast and promptly over the internet
• Work can be easily set up
Offshore outsourcing is divided into various categories, namely:
ITO: This involves outsourcing internet and computer related services like programming and data processing. A company usually conducts ITO mainly to reduce costs, or due to lack of resources and so on.
BPO: This involves running call centers and does not involve much technical work.
Software development: This involves providing for development of offshore software and is beneficial to companies, as it is much cheaper than the use of local providers. This is a new area of outsourcing in the market, and is gradually becoming popular.
Marketing outsourcing: This involves hiring an external marketing company to design and conduct marketing and promotional campaigns on behalf of the company.
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