Invoice Bazaar Blog

Should a small business consider offshore outsourcing of its non-client facing functions?

By Invoice Bazaar | February 12, 2021

Offshore outsourcing is a strategy wherein your business enterprise moves some of its select tasks or functions to another company located in some foreign country with the aim of accomplishing qualitatively comparable or superior performance or output at lower labour costs. Generally, it involves depending on a trusted foreign company specializing in business processes so that your firm can concentrate on its core functions and competencies, enabling it to manage its entire operation optimally, sustainably and cost-effectively.

By relocating some of the tasks or functions to an overseas company, your business enterprise can avail the services of a pool of well-qualified and highly skilled staff who have capabilities and experience which you may not be able to afford locally. As the destination countries for offshore outsourcing are generally developing nations with relatively low wages and employment benefits, you will also witness significant cost savings by moving some of the jobs or processes offshore. 

For instance, offshore outsourcing of some specialized tasks such as IT, research, financial services and technical support will give your firm easy access to the expertise of qualified workers with niche skills at much lower rates. In such cases, offshore outsourcing will also free up your precious resources as you won’t have to invest your money in the latest technology or real estate or hire a qualified workforce. You can then redirect these freed resources to core business operations, which will eventually boost your turnover and profits. 

Empirical data shows that offshore outsourcing is one way to cut costs, improve margins, offer 24/7 technical support and enhance after-sale services. However, one of the significant pitfalls of offshore outsourcing is the lack of confidentiality and the risk of losing sensitive information. Hence, as the business owner, if you have some concerns with the said disadvantages, your small business can undoubtedly consider offshore outsourcing of non-customer-facing tasks such as data entry, research and analysis, non-confidential document management, claims processing, IT maintenance, etc.