Q. What is offshoring?
A. Offshoring involves the relocation of business processes from a high cost country to a low cost country, in order to decrease costs, find skilled talent, increase productivity and generally gain a long term competitive advantage.
Q. What is outsourcing?
A. Outsourcing is the practice of buying products and/or services from a third party. Outsourcing can take place in the country in which you are based or in another country. Wherever you contract these outsourcing services, they are controlled by a third party vendor. One example would be an auto manufacturer outsourcing their need for vehicle tires to an independent supplier.
Q. What is the relationship between offshoring and outsourcing?
A. Offshoring is often confused with offshore outsourcing. However, whilst outsourcing works well for certain industry segments, in the knowledge economy and the human services industry, offshoring is the most effective method for extending your workforce overseas, affording you input and control at every level.
But because of the complexities of setting up a business in a foreign country, the ‘pure’ offshoring approach is normally used only by the largest companies. Most other companies wishing to benefit from offshoring are either forced or choose to combine it with outsourcing, handing responsibility for their business processes to a third party company, located offshore. Outsourcing has therefore become synonymous with offshoring in most cases. This has been actively enocourraged by the offshore outsourcing industy itself – obviously it suits them to bundle the two concepts together as they are able to charge far higher fees this way (good for them, but not so good for clients).
The key point, though, is that just as you can outsource without offshoring, so you can also choose to offshore without outsourcing.
Q. How much can we save?
A. From 50% up to 70% is typical, depending on the role, once your offshore team is fully developed. As a rule of thumb, higher onshore salaries normally allow higher percentage savings offshore.
Q. Are there any benefits other than cost savings?
A. Whilst the cost savings are significant, there can be other important benefits to offshoring, for example access to a skilled pool of labour to overcome shortages in the on shore country (where SMEs in particular may find it hard to compete with larger companies), freeing up onshore staff to concentrate on strategic activities to grow the business, and preserving capital for reinvestment into the business.
Q. Why not just hand everything over to a third party outsourcer?
A. You’ll save less and you will have much less control and visibility on how your work is managed. As a result your customers are more likely to see a deterioration in quality/service but your management overhead will probably be the same if not more. Furthermore, if you are a SME, you will struggle to find a provider of suitable quality that’s interested in your business. And if the relationship breaks down, it will be awkward to extract yourself from the multi-year deal they will want you to enter into.
Q. How easy will it be to cancel if our plans change?
A. Relatively straightforward. We do not insist on multi year agreements, just a 3 month notice period, to allow us to give notice to the staff and redeploy the office space etc elsewhere.
Q. Why India?
A. India has proven itself over the last decade to be the world’s preferred destination for both outsourcing and offshoring, currently accounting for over 80% of the entire offshore services industry. India was part of the British Empire for over a century and therefore has historically close ties with the UK. More recently, it has exported skilled labour to, and built close cultural and working relationships with, many leading economies around the world, not least the US. Overall, the excellent cost advantages, the fluency in English, the available pool of multi-skilled talent aross many sectors, and now the successful track record in offshoring, have all made India the natural choice for all companies looking to develop their offshore capabilities.
Q. How does the pricing work?
A. Pure Offshoring offers a fixed + salary per-person payment structure based on the skill sets and experience level of the individual staff member. One simple monthly fee covers the cost of recruitment, salary, management, workspace, equipment and ongoing expenses of your staff.
Q. What about the costs involved in communicating with my staff?
A. Most communications can be done digitally. We will assist you in finding the most cost effective telephony mode to communicate with your staff.
Many of our clients use Skype and Voip which are extremely economical. In addition it is easy to communicate with them using instant messaging programs and of course email.
Q. What about the worker’s qualification for the job?
A. Whatever your needs, we will help you find the right employees. We have rigorous and extensive hiring practices. We generally pay top industry salaries. Working according to your specifications, we hire well-trained and experienced individuals to be part of your company’s extended workforce.
Most of our applicants are graduates or postgraduates and have practical relevant experience in the workplace. They show up on time, dress professionally and are eager to work. Your workers will all be fully dedicated professionals.
Q. What time zone do I have to communicate in?
A. Pure Offshoring offers unprecedented flexibility with our staffing protocol. Whether you are in London or Los Angeles, we can arrange for your staff to work simultaneously with you if required. You chose the time shift to meet your business needs.
Q. Why can’t we simply set up our own offshore office, how do you add value?
A. We have done all the heavy lifting for you – we have made significant investments of both time and money, acquiring local knowledge and setting up the physical, technical and legal infrastructure to allow you to maximise your savings whilst minimising your expenses. Having said that, you are perfectly free to set up on your own in due course if you wish, and in fact we can also assist with that if you require.
Q. How do we know we will be happy with the offshore staff?
A. You have the final say on hiring and firing, so you will therefore only be employing people you’re happy with.
Q. How can we ensure that we retain our best offshore staff?
A. Just like onshore staff – provide decent training, career path opportunities and good benefits. We will help by providing a great place to work.
