Opening up of the global economies has made offshore outsourcing accessible to companies all over the world. Businesses in the developed countries regularly go for offshore outsourcing, thus taking advantage of lower labour costs and convenient currency exchange values.
Many people mix up the terms outsourcing and offshoring. Outsourcing can be either offshore or within your country. In other words, offshore outsourcing is a sub set of outsourcing. Offshore outsourcing is often a way to avail the cost benefits of the country to which work is outsourced.
Companies that consider outsourcing have their own specific business drivers that can be categorized into the following reasons.
- Cost saving due to low labour rates or economies of scale.
- A decision to focus on core competencies and get peripheral tasks accomplished by a third party
- The possibility of having variable capacities
- Inadequate resources within the company to meet a sudden requirement
- Increased effectiveness or efficiency by allocating tasks to specialist outfits
- More flexibility
- Costs become more predictable
- No need to continue investing on internal infrastructure
- Immediate access to newer technologies and ways of doing things without having to invest huge amounts to own them