The availability and widespread use of the internet had enabled companies, both small scales and large firms all over the world, to contract freelancers and small businesses due to lower production costs and wages.
There are two terms that make up offshore outsourcing.
Offshoring happens when a company works with a 3rd party organization to do a specific work for their expertise that are not available in the said company while Outsourcing refers to getting work done in a different country in order to minimize cost.
The Benefits Cost Advantage Most companies find it cheaper to hire 3rd party organization due to lower wages and production cost in other countries.
For example, most telecommunications company would opt to hire technical support representatives in countries where the minimum wage is practically lower due to the laws set there.
Skills This means the availability of skilled human resources that another region or country can offer.
For example, most companies tend to hire Asians with better English proficiency level as call center representatives.
There are also some that are based on research and development in which the niche or topic is region specific.
Labor Flexibility Outsourcing allows companies to ramp up employment because of the availability of human resources in other countries.
Also, they won't have to worry about hiring and firing as it is the 3rd party organization's task to provide it.
Quality and Capability Some companies don't have in-house expertise needed for a certain task.
It also happens sometimes when the quality is higher when the work is outsourced offshore.
There may be disadvantages to offshore outsourcing.
There had been several failed projects due to poor communication, region specific banes such as energy failure or civil unrest, poor infrastructure in a country which leads to poor quality and untracked timelines.
Best Practices Many of the best practices that have evolved since the term outsourcing and offshoring were coined in 1980s.
Most of them were through a careful analysis of business processes, or process maturity.
Process maturity does not only measure the quality of processes that outsourcing vendors employ, but well how their processes are established, quality assurance with key metrics and how they continually improve their business processes.
Offshore outsourcing have gained popularity both to small firms and large companies as it had been a good option for those who are trying to cut costs but gain better quality over the years.
Home based freelancers and outsourcing vendors have gained good relationship with their employers for the quality of work that were done in spite the distance.
Besides, advancements in technology have solved the problems in poor communication because of availability of the internet and good communication tools.
Other risks and hitches can be understood and negotiated upon.
Offshore outsourcing is a good idea for those who are looking for good quality at a lower cost.
Before going into such practice, you first make sure that you will be able to keep track of your outsourcing vendor.
Therefore, the most important things in offshore outsourcing is a mutual understanding among parties and a constant line of communication.