Offshoring

What is offshoring?

Offshoring a business refers to moving/relocating the business to a different location to so that the organization gets to work in more favorable conditions. The move may offer things to the business:

• More favorable production conditions.
• Lower production costs.
• Lower labor costs.
• Accessible resources.

What is an example of offshoring?

Google is a pretty common example of companies that successfully offshored its business. In the year 2020, Google launched its R&D center in Ukraine by acquiring Cloud Simple. Now, Cloud Simple is a part of Google Cloud and this move helped Google cut back on business expenses by hiring Ukraine's IT workforce.

What is the difference between offshoring and outsourcing?

While offshoring refers to getting work done in a different country, outsourcing has a whole another meaning. Outsourcing refers to the scenario in which a business hires other organizations on contract to fulfil certain assignments. Outsourcing allows an org to make the most of specialized skills, workforce flexibility, and lower business expenses, and all by hiring outside help to do the bidding.

Why is offshoring bad?

Offshoring is an advantageous process, but it also has its various cons. A company is moving to another country to continue the same business they were conducting in their own home country can pose an infinite number of challenges, but the most prominent ones are:

1. The barriers of communication cause misunderstandings.
2. Cultural differences and social barriers.
3. Limited accessibility to quality control.
4. Depriving the people in the home country of jobs that could be theirs.
5. Adjustments to be made due to the varying time zones.

What is data offshoring?

Offshore data processing refers to having the data a business deals with and processing it outside of the country/countries that the data is being gathered in. This offshoring of data is considered to be an international transfer.

What are the benefits of offshoring?

Here are some of the most prominent benefits that come with offshoring:

• Lower production costs
• Easier access to resources
• Cheaper labor
• Faster speed to market
• Larger talent pool
• More flexible way of working
• Target global market