It is often said that outsourcing helps businesses increase their business efficiency. Many businesspeople are outsourcing these days to take care of some aspects of their business operations so they can focus on more important activities.

Offshoring outsourcing means taking an offshoot or part of your business and outsourcing it to a company in another country, usually at lower costs. This type of outsourcing works well for many companies because they save on operational expenses while ensuring high quality of work.

Other benefits may include being able to specialise in your core competence without having to deal with the day-to-day functions related to other aspects of your company, access to resources that you do not have internally, potential cost savings through outsourcing, etc

Small companies are more likely than large companies to outsource because they have smaller teams, less expertise, etc., so outsourcing means more opportunities for them.

However, outsourcing is not without its risks. You need to be very careful about who you choose to do outsourcing with and how you monitor the service provider's work. Make sure that outsourcing partners are capable of delivering quality work within your budget constraints. Find someone specialised in your industry, rather than generalists who lack proper knowledge of your field or sector.

You also need to make sure that outsourcing contracts are detailed enough to prevent misunderstandings or disputes down the line while giving you enough freedom for operational flexibility. Be wary of contracts that lock you in too tightly without any room for manoeuvre if something goes wrong later on.

So outsourcing is the optimal solution to keep your business efficient. And if you are outsourcing overseas, go offshoring with the bpo Philippines to maximise business efficiency.

In this article, we’re going to talk about the pros and cons of outsourcing jobs to top offshore destinations in the world such as the Philippines. This guide will help you indicate obvious outsourcing or offshoring problems and will give you some insights on how to mitigate them.

Offshoring, the practice of moving jobs and business processes to less expensive locations, is no longer a trend. It has become an accepted way of doing business for many companies.

Why go offshore? This question is asked by every entrepreneur who wants to go global but does not have the resources or capital to go head-to-head in competitive markets with established players. Offshoring provides access to skills, knowledge and capabilities without having to go through all the efforts - time and money wasted - needed when establishing overseas operations from scratch. 

Offshore can go beyond reducing costs. It is about leveraging the time zone difference, which opens up your business to serve customers across different continents at virtually no additional cost. You can also tap into specific skills that may not be available locally within set turnaround times.

Offshoring has its disadvantages, though. At first, glance, sending work processes offshore seems like a good deal, but there are many factors to take into consideration before jumping in headfirst without due diligence. When you go offshoring, it's crucial to partner with an experienced provider who knows how to manage projects successfully despite having different cultures and languages involved. Besides being aware of the nuances of doing business in different countries, you need someone who understands your industry or profession inside out so that they can manage your processes accurately.

Marketing outsourcing is becoming more and more popular. With today's technology, communication has never been easier, but the risk of communicating with someone who does not share a common language or culture still exists. To go offshore means to outsource your marketing efforts to another country and time zone. Offshore outsourcing is typically done in countries where business expenses are low and workers can communicate easily.

Offshoring refers to the practice of contracting an external organization to perform specific operations or services that would otherwise be performed in house by the company itself. It is often used for telecommuting and offsite work such as customer service call centres.

The Philippines offers many advantages for businesses looking to go offshore, including cheap labour rates, the excellent time zone for US-based organizations, English speaking, easy to reach and communicate with, high education levels, low offshore marketing cost, attractive geographical location.

It has traditionally been an attractive location for outsourcing because of its proximity to the United States, its stable government and political environment, use of American English as its official language (similar to that of the United States), a large number of highly educated people fluent in English, relatively inexpensive operating costs compared to other areas.

The Philippines is one of the largest call centre service providers in Asia. The country continues to provide financial incentives for companies willing to go offshore. The Outsourcing Act provides special tax holidays and permanently reduced rate visas for employees who go offshore. This law has helped increase business process outsourcing companies have set up shop in the country.

Offshoring your marketing efforts to the Philippines has many benefits including referral programs, gov-corp, goad rates, low cost of living. It is one of the best ways to expand your business worldwide at a lower cost.

An offshore software development team is usually considered the go-to solution for businesses that want to reduce costs or go global.

The benefits of an outsourced team are obvious: access to top talent at low cost increased productivity etc. However, there are also some risks and challenges associated with working with an offshore team, so let's go over them one by one.

Risks

1) Attrition risk: The attrition rate in India for IT professionals is about 6%, while it's only 2% in the US (source). With statistics like these, it might be hard to count on your Indian teammates staying around long enough to develop a solid relationship. Your employees may get recruited away by another company, or go back home after getting married or having a baby.

2) Cultural differences: Many people go offshore to save money, but fail to realize that there's a cost associated with cultural differences as well. For one thing, time zones can cause a lot of issues if you're not careful enough. However, the biggest issue is that it's harder for remote employees to build up trust and rapport with coworkers in person - something that contributes largely to productivity levels (source).

3) Lack of face-to-face communication: People often go on about how important face-to-face meetings are within a team because they allow for better understanding and faster decision making processes. If you go offshore, your team will have difficulties building those relationships due to a lack of face-to-face communication.

4) Quality issues: This may go both ways: your team can produce higher quality code than what you're used to, but it could also happen that they'll deliver poor-quality work due to cultural and language barriers. You should set up a rigorous testing process as well as a bug tracking system from the get-go if you go down this route.

5) Time zone differences: For your team to be productive, they will need to overlap with yours at least partially - i.e., there needs to be some overlap between Indian local time and American working hours...which happens around 2 AM in India. If you go with a global team that's distributed across various time zones, then good luck getting anything done during that time - your colleagues in another part of the world will go to sleep while you're working.

6) Knowledge transfer problems: If you go with a global team distributed across various time zones, then good luck getting anything done during that time - your colleagues in another part of the world will go to sleep while you're working. To avoid these kinds of issues, companies go offshore because they need certain skillsets nobody has in-house, but it's not always easy to find someone who has exactly what you need and transfers knowledge fast enough.

7) Onboarding difficulty: Onboarding can be a lengthy process when going offshore, especially if cultural differences are present. For example, it takes about 20 hours for an American developer to be productive in a new environment, but 28 hours for an Indian one (source). If you go with a large number of developers from the same country, it's going to be easier.

8) Time difference: If you go with a larger offshoring team, then you'll have to deal with time differences daily. You may go through 15-20 hour days because your teammates are fast asleep while you work...which can lead to burnouts and high attrition rates.

Challenges

1) Finding good talent: There is no doubt that finding talented remote employees is not as easy as finding local ones. You usually need to go through more interviews and spend more time on hiring people who don't end up being a good fit.

2) Collaboration difficulties: This is often cited as the number one challenge when working with an offshore team. Because your teammates are in a different time zone, it can be hard to get them to collaborate on projects 24/7 (source). Also, go-to people within distributed teams tend to emerge - which leads to knowledge silos even among members of the same team.

3) Maintaining motivation levels: Offshoring is only viable if you go with larger teams because otherwise, everyone on the same project can’t communicate and stay motivated at all times (source). As I mentioned earlier, smaller teams suffer from attrition, while bigger ones go through knowledge transfer problems that slow down development significantly. You should go with a group of developers who can work independently, don't need handholding and go through knowledge transfer processes fast enough.

4) Time zone differences: If you go with a global team that's distributed across various time zones, then good luck getting anything done during that time - your colleagues in another part of the world will go to sleep while you're working. There is no rule of thumb for this because it all depends on the type of project you go with. However, if you go offshore, make sure you set up several daily video calls so everyone gets acquainted faster (source).

5) Time zone differences: If you go with a larger offshoring team, then you'll have to deal with time differences daily. You may go through 15-20 hour days because your teammates in another part of the world are fast asleep while you work...which can lead to burnouts and high attrition rates.

6) Knowledge transfer problems: This is often cited as the number one challenge when working with an offshore team. Because your teammates are in a different time zone, it can be hard to get them to collaborate on projects 24/7 (source). Also, go-to people within distributed teams tend to emerge - which leads to knowledge silos even among members of the same team.

7) Onboarding difficulty: If you go with a global team distributed across various time zones, then good luck getting anything done during that time - your colleagues in another part of the world go to sleep while you're working. There is no rule of thumb for this because it all depends on the type of project you go with. However, if go offshore, make sure you set up several daily video calls so everyone gets acquainted faster (source).

8) Time difference: This can lead to burnouts and high attrition rates. You should go with a group of developers who can work independently, don't need handholding and go through knowledge transfer processes fast enough.

Offshoring enables businesses to go after new markets in countries with cheap labour pools. A large number of these emerging economies are located in Asia making it the go-to destination for businesses looking to go offshore. 

Organizations that successfully go offshore must overcome a set of challenges not faced when setting up an onshore operations centre. Not addressing these issues can lead to poor results and unnecessary costs during operations."

The article goes on to list some key reasons why companies go offshore, the most important of which is almost always cost savings. However, there are countless other benefits including improved access to skilled workers, increased outsourcing flexibility, and the ability to expand into new global markets with lower risks than opening a branch office within their target market.

The challenges go offshore companies face when dealing with foreign markets include: 

Inefficient Communication: When organizations go offshore, communication becomes an issue because the time difference between workers and clients must be taken into account. Effective communication requires a high level of understanding and effective listening skills which can be hindered by time zone differences. It is important to train employees in these areas so that issues do not arise later on during operations. 

Poor Processes: The processes used for back-office operations such as finance and accounting may need to go through changes to accommodate new business practices. For example, many businesses go offshore after experiencing large amounts of unproductive time due to wasteful internal processes that must be streamlined before going offshore. 

Loss of Control: Conversely, employees who go offshore might need to be reminded that their work is being monitored and scrutinized by home office managers even if they are thousands of miles away from the business. The go offshore company needs to increase transparency to build trust with its partners during operations. 

Lack of Accessibility: Because go offshore companies have a limited workforce located in foreign markets, it can sometimes become difficult for clients to get in contact with going offshore employees when issues arise. For example, a customer might send emails or phone calls but not receive responses due to communication difficulties. It is important to go offshore companies establish quality control practices before going into new foreign markets so that they can remain accessible.

The go offshore company can overcome these challenges by properly training to go offshore employees, using an open communication system to prevent bottlenecks in operations, and establishing quality control mechanisms before going into a new market to ensure long term results. Businesses taking their first steps towards going offshore should use the tips provided above as a roadmap for success when going from onshore to offshore. 

The Philippines is a great location for offshoring. To go offshore, you should go to the best place that can provide high-quality support staff.

You have many choices when going offshore, but it's best to go to a country where costs are low and whose government encourages foreign investment.

The Philippines has a lot of advantages as an offshoring destination:

It ranks as one of the top outsourcing destinations in the Asia Pacific because it has been able to compete with India on price while providing service levels comparable or even better than those offered by its Indian counterparts. In 2009, revenue from IT-related business process outsourcing activities totalled almost $11 billion up from only $1 billion six years ago. The industry now accounts for 10% of the country's GDP.

The Philippines has a large pool of high-skilled, English-speaking workers who are willing to go the extra mile to help you meet your business goals. It is ranked in the top ranks in literacy in both English and Filipino making it easier for Filipinos to communicate with people from other countries.

The Philippines is one of the most educated countries in the Asia Pacific with over 90% of all elementary school students enrolled in public schools receiving basic education at no cost. The enrolment rate reflects an increase from 91 per cent in 2008 and 88 per cent in 2007.

Its economy has been growing faster than most Asian countries year after year. Its growing population ensures that there will always be a steady supply of talented young workers available for jobs at competitive salaries.

The country has put in place laws to protect foreign investment which gives you the confidence that your business is safe and sound when doing business in the Philippines. It also offers generous tax holidays which allow companies to enjoy income-tax-free for up to eight years on their export sales, import substitutes, and reinvested export earnings.

Thinking about going offshore? Here are some tips on how you can go about it:

1.) Focus on what needs to be done before deciding where you go

One of the most important factors that you should consider when going offshore is analyzing what tasks need to be completed before finalizing where you go. Ask yourself this question: "What functions do I want my offshore team to handle?" In the Philippines, offshoring companies and their staff can help you with:

·          Administrative and clerical work such as data entry

·          Accounting and finance work such as accounts receivable processing, payroll preparation, bookkeeping services, tax return preparation

·          Content development such as web design and content writing

2.) Look for specific skills that you want your outsourcing partner to have

Identify the skills that you are looking for in an offshore supplier. Do not go into a particular country with preconceived notions of what it can offer. What's important is that your outsourcing partner can understand your business process needs fully before offering suggestions on how they can go about it. It would be easier if you go to a country that has an outsourcing industry already developed. The Philippines, for instance, is one of the most mature outsourcing destinations compared with countries in the region because it offers a complete package of services—from looking for offshoring business partners to helping you set up your offshore centre.

3.) Check out the tax rates if you are considering getting local staff

One factor that can affect how much money your business can save when going offshore is income taxes which vary from one country to another. Find out what rate your host country charges and ask yourself if this will be enough for you to sustain long-term operations or if it might affect profitability? You may want to go elsewhere if the rates are too high at least in the beginning stages of your business.

4.) Focus on the most important characteristics of a country when choosing an offshoring destination

The Philippines offers one of the most competitive cost advantages you can find in the Asia Pacific with a cost advantage of up to 45%. It also scores high marks on numerous indicators such as:

·          Its highly literate workforce is constantly improving its skills and updating its knowledge base through continuing education, leading to increased productivity

·          Specialized talent pool for specific industries such as BPO (business process outsourcing) and IT-enabled services (ITES)

·          Government's effort to keep abreast of ICT developments and promote e-governance and m-government ensures that residents will have access to a wide range of gov't services anytime and anywhere

·          An efficient transportation system that ensures the delivery of people, goods, and services

5.) Look for an outsourcing partner you can work with on feasible time zone differences

The Philippines is seven hours ahead of New York. This means that both parties can go about business operations without disrupting each other's work schedules.

6.) Consider what your offshoring partner offers besides English proficiency (if you are looking for English-fluent staff)

While the ability to speak in English is important when choosing where to go offshore, it may not be enough especially if you want your company to reach more clients in the United States, UK, Australia or Ireland which are where there are Spanish-speakers. You have to go beyond the English language capabilities of your outsourcing partner. You may want to go to countries where Spanish is the primary language spoken like Chile or Peru for instance.

7.) Make sure you go with an offshoring company that has vast experience in helping clients go offshore

Look for an offshoring partner with sufficient experience in international business process outsourcing (IBPO) and call centre operations, especially if you plan to set up a BPO yourself. A seasoned provider will know all the ins and outs of setting up an offshore supplier; one that can guide you through every step of the way, not only to get started but also when it comes time to expand your business. They should be able to match the right people with the right job and ensure their training in customer service management to meet company standards. They should also go beyond basic needs by adding value through operational efficiency improvement which companies often demand when going offshore.

8.) Identify a partner that can offer a comprehensive package of services in addition to office space/accommodation

You may want to go for an offshoring partner that can give you more than just office space. A potential collaboration with an outsourcing provider offering more on top of facilities means increased convenience, greater flexibility especially if your business is at its startup stage, added security, access to the qualified labour pool, steady cash flow as well as tax incentives from the host government—all of which are key ingredients for business success.

9.) Look for a provider that has the lowest turnover rate in the industry (the lowest staff attrition/churn rate)

You go to an offshoring partner because you want to save money and increase productivity. The last thing you need is a workforce flitting from job to job. Low attrition or churn rate will ensure continuity and consistency no matter what challenges come your way, and it also means you can focus on running your business. What's more important is that your outsourcing partner ensures better conditions for its employees – higher pay, bonuses, allowances – as this will go a long way in ensuring their loyalty to the company as well as quality service delivery.

10.) Check if there are any legal restrictions as well as currency trading issues

Currency fluctuations are beyond anyone's control, but you have to go to an offshoring partner that will ensure your business’s future by having a sound financial plan, whether it is saving up for market conditions when currencies go against the dollar or simply hedging currency risk so you can go with the flow. Offshore partners should be able to assist their clients in dealing with other legal restrictions that may affect business transactions between both parties. You should go with a provider that has experts who can guide you through all the hurdles before you even step into this journey.

Offshore outsourcing providers are highly-skilled experts capable of delivering big results for their clients, particularly those offering office space and facilities management, technology support services such as application development, call centre operations and BPO. This is why they go hand in hand in ensuring that business runs like clockwork.