It has pretty much been a well-established fact that offshoring your business operations leads to greatly reduced operational and manpower costs; which is the reason the BPO industry has enjoyed steady growth worldwide in the past decade. The success of pioneer companies who have chosen offshore outsourcing has only further catapulted the demand for these offshore services.
You may have already decided that offshoring is the best solution for your business purposes. But the decision on which form of offshore operations would be more beneficial is yet another question. Should you outsource your operations to a third-party provider… or opt for captive offshoring?
Both of these options have their unique qualities, so the only determining factor for which one works best would be based on your own goals and needs as an organization. But it helps to be clear about what purposes each one of these options serves, in order to center in on the qualities that fit your company best.
Offshore Outsourcing
Offshore outsourcing has so far been the more popular choice of businesses, for its cost-effectiveness and ease of startup capacity. Starting operations in a foreign country can require tedious research, as well as hassles in government regulations, which tend to be strict with foreign investments issues. A local outsource provider from your country of choice would greatly reduce these time and money-consuming headaches of setting up operations, since obviously, they have all the necessary knowledge and experience in running operations within their country.
Offshore outsource services conveniently take care of government documents, implementation of the facilities and IT systems needed, and manpower hiring and training, so that you can immediately start operations.
The only downside to outsourcing your operations is the lower degree of control you may have, since your third-party provider will be the one overseeing your operations for the most part. This doesn’t have to be a problem, however, if you have chosen a reliable provider who makes it a point to be transparent with you regarding all operations.
Captive Outsourcing
Conversely, the decision to start your own headquarters in the foreign country of choice will give you much more control over your operations. You should opt for this as well if your company is well-established in growth and resources and has high knowledge information sensitivity, so that you can ensure the security of your data. Data leakage can be an issue, especially when you outsource to various service providers.
The challenge in captive outsourcing would be in the greater initial costs you will need to incur in setting up your own headquarters in another country. The cost benefits only become apparent in the long-run. Nonetheless, significant gains are seen in running operations in a low-cost country.
Larger businesses with goals of permanency tend to choose captive outsourcing, while smaller companies or ones with more temporary projects find outsourced services to be more beneficial to their objectives.
There is no hard-set solution for which of these two options would be better for your business, given the uniqueness of each company’s needs, goals, and resources. But in general, it’s safe to say that offshoring through outsourced services and captive outsourcing both lead to reduced costs for business operations.
Ezy Outsourcing Hub is one of the leading and experienced offshore outsource providers in the Philippines today. We not only specialize in providing offshore services; we can deliver creative solutions for your business operations as well, whether you need our expert facilitation of your operations here, or support in starting up your captive center. We can help ease your transition, so that you can start your operations in the Philippines in the most cost-effective and convenient ways possible. Contact us today.
