When talking about outsourcing you come across terms like “offshoring”, “nearshoring” and “onshoring”. These words indicate the geographical position of the BPO partner, a very important factor, taking into account time zones, cultural differences, costs, language skills and many other aspects. <\/p>\n
On the web very often the information is vague and limited; in this article we will try to shed light on these three outsourcing models, highlighting the advantages and disadvantages of each. <\/p>\n
Onshoring Outsourcing<\/h2>\n
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Onshore outsourcing is also known as domestic outsourcing. It means that the company outsources locally, in the same nation in which it is located. The main advantage is definitely proximity, therefore also a better control of operations. On the downside, however, the prices of onshoring outsourcing are higher compared to the other types. This characteristic does not always correspond to better quality. <\/p>\n
In addition, outsourcing in your own country will restrict access to global talent, will make scalability and flexibility more difficult and will limit the area of expertise available.<\/p>\n
Offshoring Outsourcing<\/h2>\n
Offshoring means subcontracting services to a company that is based far from the company’s headquarters. Normally Offshoring means outsourcing to a company located on a different continent. The main advantage of Offshoring lies in having low operating costs. Another advantage lies in the coverage service hours that would otherwise be very difficult to manage (night shifts and after-hours). However, outsourcing to a distant geographical position can become problematic, since communication problems can arise (different time zones, difficult to reach, difficult to monitor, travel inconveniences, language and cultural barriers, etc.). Having low costs at the expense of service quality is anything but a winning business strategy. In the long term, in fact, the choice of low costs at the expense of quality will prove to be a costly solution.<\/p>\n
Nearshoring Outsourcing<\/h2>\n
As the name suggests, nearshoring means “near” home, but not entirely. <\/p>\n
Nearshoring is useful for companies that want a constant, real-time collaboration with their own internal staff. For a company based in Paris, nearshoring could be done with Ukraine, which is only a couple of hours ahead.<\/p>\n
While being slightly more expensive than offshoring, nearshoring has several other advantages, such as being in a time zone similar to your partner, having more control over your projects, having a similar company culture, having access to a larger pool of workforce, and so on. <\/p>\n
Outsourcing to a nearshore location allows companies to reduce the risks associated with offshoring.<\/p>\n
The strategic choice of the BPO partner<\/h2>\n
At the moment of choosing the partner you therefore have to take into account some aspects, such as geographical and cultural proximity and the understanding of the market in which you operate. In this way a perfect alignment is guaranteed between the company providing the service and the nearshore partner company.<\/p>\n