What is Business Process Offshoring and Is It Worth It? - Contalents Ltd

What is Business Process Offshoring and Is It Worth It?

Over the past few years, businesses in almost every industry have turned to business process offshoring

The upward tick in offshoring can be attributed to the growing demand for expert talent and globalization. And with benefits like cost savings and easy business expansion, the process is here to stay. 

But what exactly is the business process of offshoring?

In this article, we’ll discuss what business process offshoring means, its pros, and its cons. We’ll also discuss key tips for successful offshoring. 

4 Key Benefits of Business Process Offshoring

Here are some of the important benefits of offshoring your business operations:

1. Increased Cost Savings

Offshoring is usually a cost-effective affair. This is often the primary reason why most businesses opt for it. 

Here’s how offshoring can help you cut costs:

A. Labor Costs

Hiring skilled talent from popular offshoring destinations like Egypt and the Philippines is much more cost-effective than hiring the same talent in North America and Eastern European countries. 

For example, in 2022, hiring skilled labor for data entry services would cost you approximately 3,021 USD in New York City. Offshoring the same talent would only cost you around 274 USD in a developing country like the Philippines. 

B. Hiring Costs

When you offshore, you’re only paying the service provider for their work. Unlike insourcing, where you’d have to hire and train in-house employees, you won’t be dealing with these additional costs through offshoring. 

Additionally, you can save on the capital you’d otherwise spend on employee benefits, bonuses, and other overhead costs. 

2. Access to a Skilled Talent Pool

Offshoring can allow businesses to easily access any expertise they can’t find within their home country. 

An example of this is the software developer shortage in the USA. According to the Bureau of Labor Statistics, the shortage of engineers in the USA will likely exceed 1.2 million by 2026. 

The lack of specialized skills has led companies to turn to foreign countries like Ukraine, Poland, and India for software development services. These offshoring hubs can provide companies with a large and educated talent pool. 

3. Increased Business Scalability

Offshoring can aid international business expansion and scalability in various ways.


With business process offshoring, you can:

  • Understand the market in a different country before setting up a business. 
  • Save on various labour costs and invest the capital into scaling the new business. 
  • Engage in product offshoring to set up manufacturing units in an offshore location and save on production costs. 
  • Speeding up the timeline of project and development deliverables for the expansion. 

4. Access to Technology and Resources

Your business may be engaging in both core and non-core business operations. 

It’s usually possible to invest in technology, resources, and training for core competencies. 

However, your company may not be able to invest in the same resources for non-core activities. 

This is where outsourcing service providers come into the picture!

Offshore outsourcing companies usually have specializations in a particular business function and access to the latest technology. 

Additionally, an offshore tech company also has a skilled and trained human resources to deliver quality work in high volumes. 

Today, an offshore BPO service can give you access to the latest technology-related to artificial intelligence, automation robots, data analytics, design thinking, and more. 

Now that we’ve looked at the advantages of offshoring, let’s dive into its limitations. 

4 Major Limitations of Business Process Offshoring

Business process offshoring may not be suitable for all business models — especially since it comes with considerable risks. 



Final Thoughts

Offshore outsourcing can give you a competitive advantage, help a business expand, and make profits at a lower cost. 

However, the popular business strategy has both pros and limitations. That’s why it’s important to understand if offshoring is the right choice for your business and then choose the right offshore outsourcing partner.

You can go over the tips we’ve discussed in this article to do business process offshoring the right way!


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