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Offshoring isn’t only for lowering your costs

Offshoring is an outsorcing process to a distant country

Outsourcing to a distant country

Offshoring consists of subcontracting particular services to other specific geographical areas to reduce costs. The companies often offshore their production process to countries where work power is cheaper than in their original countries. It also offers the perfect opportunity for possible expansion and even more flexibility, such as customer service hours. For example, having a customer service team based in Australia will help you cover the hours of a 24-hour phone line.

Offshore services is very common in business. For example, a lot of companies outsource their costumer service to a movil phone operator. In this way, they manage customer care from locations where this service is cheaper and saves costs for the company.

Offshoring also includes hiring a single foreign employee who may be better equipped for the job than the talent available near your company’s location. If you can do the job remotely, why not open a global search? 

Types of offshoring

Depending on the company and its needs, there are different types of offshoring. These can be understood from other points of view, as it can be done in many different ways.

Depending on the point of view, we could classify the different types of offshoring according to the following characteristics:

  • Ownership
  • Distance
  • Process

Ownership

Offshoring: The company establishes sites in the regions to which it intends to relocate, with the company itself providing the capital and assets to carry out the processes.

Outsourcing: The company agrees with a company to contract the elaboration of some process or service. An external and independent company carries out these tasks.

Offshoring distance

Offshoring to distant territories: You can get lower production costs in these countries. However, there is a more significant cultural asymmetry.

Nearshoring: Relocation to nearby territories. This practice is increasingly common, especially in the United States with its neighboring countries. Hence the name “nearshoring.”

Processes

Services: This consists of the provision of services abroad. Very common in services such as customer service.

Manufacturing: outsource of production processes to factories and production sites abroad.

Sales: This occurs when companies wish to open up new markets and establish new sales networks.

Research and development: This consists of offshoring those activities that add value to the service or product. In this way, many companies establish their research centers in more developed locations.

Advantages and disadvantages of offshoring

When a company decides to apply offshoring in its business, it should be aware that it is not all advantages. Even if cost savings are significant, other risk factors, such as the loss of intellectual property have caused significant problems. 

For this reason, if a company decides outshore to a distant country, it should be aware that several advantages and disadvantages are fundamental. 

Among the advantages of offshoring, we could highlight the following:

  • Cost savings.
  • Increased productivity.
  • Opening up new markets.
  • Hiring cheap labor. 
  • Diversification of risk.

On the other hand, the disadvantages of offshoring include:

  • Loss of intellectual property.
  • Cultural and linguistic conflict.
  • Loss of product quality.
  • Precarious workers.
  • Loss of control in the company.

1. Cost savings 

This is probably the most apparent benefit of offshoring. By offshoring to a country where labor is cheaper, you automatically save money on both services and production (as long as shipping is not more expensive).  

The continent where the accounting department is located is likely to have much lower rental costs. This benefit includes labor costs in the country where you have offshored and the cost of office space. You don’t have to worry about where to put the accounting department if it is on another continent. 

2. Tax benefits 

This is another excellent way to save money. If you choose your offshoring location carefully, you will be able to take advantage of tax breaks if the foreign government is trying to stimulate the local economy by reducing taxes for businesses. 

3. New markets and ease of scaling up 

Offshoring parts of your business will meke much easier for you to open up new markets. After doing that, is much easier to expand in the country you are offshoring to, and hiring new foreign workers is less of a financial burden. 

4. Experience 

Offshoring allows you to access a completely different field of professionals and create a diverse and talented team by hiring foreign employees at lower labor costs. 

 

Select an offshoring reliable partner

Offshoring is an excellent alternative to significantly lower production costs and expanding a business. As we can see, it is also necessary to weigh up the cons of offshoring. Because of that, it is essential to draw up a detailed plan that determines the objectives of the business strategy. It is critical to deal with the risks or drawbacks that certain operations in a foreign country may entail.

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Subcontracting or outsourcing: how to choose?

Outsourcing Vs. Subcontracting: which is the best?

As is well known, within organizations, companies develop different processes in diverse business areas to achieve their objectives. Some companies need to focus on the most critical processes. Because of that, they invest more resources in the areas they consider most relevant for the organization’s development. As a result, some companies decide to reduce the burden of fewer core activities by subcontracting to external agents.

At the same time, companies seek to reduce costs and increase levels of competitiveness. And many choose to do so in the same way: by subcontracting external professional staff to facilitate the execution of activities. As they are agents from outside the organization, the generated costs are lower than those obtained through internal resources.
This technique allows the entry of external personnel into the organizations to carry out the tasks that the company is known as “outsourcing.”

Outsourcing

Today’s managers running their organizations face a host of changes, which include:

  • Globalizing activities.
  • Growing without having to use more resources (more capital).
  • Reducing costs.
  • Understanding consumer tastes.
  • The need to respond to threats and, above all, to opportunities.
  • The aging workforce

What identifies outsourcing as a practice carried out by an organization is that a third party performs one or more functions that were previously the organization’s own. At a certain point and for various reasons, the company stops performing them and transfers them to a third party.

Many people confuse outsourcing with subcontracting, but there are essential differences between the two. In subcontracting, the company that contracts the service only determines the work, and the contractor fulfills it. On the other hand, there is an exchange of information, coordination, and, above all, trust in outsourcing.

For example, call centers are where telephone assistance is provided personally to customers. These companies can help from outside the client’s home country, India, Pakistan, Uruguay, and the Philippines. Outsourcing this service provides a competitive advantage to the organization. It is a way to reduce costs in customer service, as it is much cheaper than having an internal department responsible for this activity.

Outsourcing or subcontracting?

In the past, many considered outsourcing a way to reduce costs. Nowadays, it has proven to be a beneficial technique for the growth of companies for reasons such as the following:

  • Cost reduction and control. In some cases, it is cheaper to outsource certain activities to third parties than to have the organization itself carry them out).
  • Having high capacity staff.
  • Allocate most of the resources and investments to the organization’s primary objectives.
  • Greater efficiency.
  • You will get instant access to technology but with out the need of constant invest.
  • Improve response times.
  • Transfer the challenge of technological innovation and evolution to the service provider.

Aspects to take into account when making an outsourcing or subcontracting contract.

Don't matter if you are subcontracting or outsourcing: select the correct partner.

The outsourcing, being a contract, acquires a legal character and is the main element between the company that requests the outsourcing services and the company that provides them. Within this contract, three dates are essential: the date the contract is signed, when the service provider will start performing its activities, and when the terms of the agreement will come into effect.

The following factors need to be considered when making the outsourcing contract:

Initial decisions.

  • Establish the services to be outsourced will be your first decition.
  • Determine the resources you will use in the negotiation (technical expertise, legal advice, functional management).
  • Establish the start date of the contract and the end date.
  • Ensure the feasibility of using external agents. 

Terms.

  • Identify the location(s) where our partner will perform the outsourcing services.
  • Determine the equipment your supplier will need to provide the services. Even if it isn’t your resposability, it could be useful consider it.
  • Establish the terms of reference for the services and their level.

The facilities.

  • Establish if our supplier will carry out the services at our facilities or their ones 
  • Establish whether facilities requiring a separate contract will be rented or sold to the supplier.

Method of payment.

  • Establish the process for calculating payment for the service.
  • Define whether any charge our partner will make for material and time.
  • Establish the method of payment.
  • Define whether a discount system our partner will apply for non-compliance with any of the contract terms.

Conclusion.

If you use it correctly, outsourcing is a tool for the management of organizations brings multiple benefits.

With outsourcing, the company that hires the service can disengage from the activities that do not require its full attention to concentrate on the areas of greater importance, leaving the less relevant activities to external companies.

Lead generation call centers only hire the most profesional staff

Lead generation: a great way to get more customers

Lead generation call center agent

Businesses and companies worldwide may vary in industry type, functions, or size. However, they all fit under a common denominator: “supplying products or services when and where demand arises, for a price.” But there is something that almost all companies require to achieve that purpose: customers. This article will show how to get more customers by using lead generation services.

Regardless of their sector, all organizations focus on attracting new consumers and users through marketing, advertising, or positioning techniques. However, many companies fail to achieve this goal due to constant and robust competition. Therefore, there is one question that all companies worldwide ask themselves: How to expand and increase their customer base? That’s when companies seek the help of Lead Generation Call Centres. And you may ask, what do these call centers do?

They are dedicated to the main task

We could define a lead as a person, group, or organization that shows an interest in the products you sell. Therefore, they could potentially become a customer in the future. We can do that in several ways: interacting with them, encouraging them with discounts, sharing with them the experiences of current and past customers, etc.

However, generating a lead is a more difficult task than it seems, and at the same time, with the right strategies, easier than it looks.

Lead generation call centers

These companies are a guarantee of being able to expand your customer base. They are dedicated to contacting consumers in all geographic locations and time zones to inform them of the different offers and promotions that a company has. In this way, they can increase the percentage of potential customers and retain existing ones.

Lead generation is critical to the survival of sectors such as finance, home improvement, commercial processing, and business services. If you can identify your specific target market and need to be aggressive, telephone marketing may be the best strategy for lead generation.

Lead generation over the phone consists of:

  • Exposing target customers to your product or service.
  • Gathering additional and relevant information.
  • Obtaining leads.
  • Quickly provide data to your sales team.

Benefits of lead generation

Among the various arguments that we can find favoring the process, three key benefits that a business can gain from lead generation.

Build recognition. The primary function of the lead building is to familiarise the masses with the products and services a company offers. If the population doesn’t know about the company’s existence products, how can they rely on it when the need arises?

Interact with potential clients. Establishing and maintaining a relationship with potential customers is of fundamental importance for growing a business. We can only successfully sustain that relationship through frequent conversations that provide the customer with valuable information. Such information may relate to the latest available products, a price change on an existing product, an anticipated offer, or a current discount. We can also organize competitions and referral programs to maintain public interaction with the company.

Increase the customer base. The number of customers of a company only can increase when people are aware of the presence of that service. After ensuring that the product name is in the market and the target audience recognizes it, we can focus in identifying interested parties. With proper attention and understanding, these contacts can become customers, expanding the organization’s customer base.

Why do lead generation call Centers work so well?

Lead generation contacts are specifically trained.

Because their employees have strong marketing skills, are customer-oriented, and have many years of experience in the field. During their contact with potential customers, they describe, inform, promote and advertise the features of your company’s products or services.

This type of call center hires professionals with previous experience and extensive training. Also holds training sessions in the call center where employees are informed about the brand image or the company’s culture. Due to this unique training, these professionals are more than prepared to solve all the questions, doubts, and concerns of consumers to decide and invest in the product or service that best suits the users’ needs. They are taught the importance of conducting contacts in a polite and informative way.

A one-off effort

As for marketing and advertising, lead generation is not a one-off, isolated effort. It is an effort that you will have to sustain. At least if you want the results obtained from initial attempts may begin to wither. To continue to receive viable leads, you must continue the process as long as you wish to expand or maintain your business.
A business can only survive as long as it can keep its clientele. Therefore, as customers are leaving, you need customers to come in, too.