In a recent survey, 84% of all company executives polled believed outsourcing was the best way to reduce production costs. This is not surprising given that the rate of growth of business outsourcing has increased substantially. Global outsourcing was estimated at $251 billion in 2021. This figure is expected to exceed $435 billion by 2028. Many companies have realized the competitive advantage that business outsourcing strategies offer. But at the same time, it’s important to align company efforts with best practices for outsourcing to optimize success. As a leader in global outsourcing services, Bold Business embraces such practices when choosing its outsourcing partners. This is a major reason Bold helps generate the success it does for its clients.
In adopting specific business outsourcing strategies, there are a number of factors to consider. Certainly, economics come into play, but at the same time, so do geographic and sociocultural factors. Other important areas to consider also relate to political climates, talent pools, and legal infrastructures. Thus, best practices in outsourcing extend well beyond a simple assessment of cost and service. Failure to explore these other aspects could place a business in an undesirable situation. And this could undermine the potential success it might otherwise achieve. With this in mind, the following explains how Bold goes about selecting its outsourcing partners for its clients.
One of the most common reasons businesses choose to outsource processes involves cost reductions. By outsourcing services to lower-cost areas, human resource expenses are often less boosting profitability. Likewise, the extra time on-site employees have can be better invested in revenue-generating activities. However, it’s essential to adopt business outsourcing strategies that target the best economic situation for business needs. Some countries specialize in low-cost IT services while others may do so in customer service, payroll, or others. Best practices for outsourcing thus requires investigating such costs. And Bold routinely performs such analyses as part of its outsourcing services.
When dealing with workers in other countries, social and cultural factors can affect quality of services as well. Therefore, business outsourcing strategies should also take this into consideration. Countries that have comparable social structures and cultures will be easier to work with long-term. At the same time, countries with diversity and inclusive practices will be more accepting of differences in values and behaviors. And best practices for outsourcing also requires comparing the specific tasks to sociocultural beliefs about those tasks. Likewise, language and communication issues must be addressed depending on a company’s needs. As the world has become increasingly globalized, these barriers are less. But social and cultural factors still play a significant role in determining which countries are best for outsourcing.
Education and Talent Considerations
One of the advantages of business outsourcing strategies relates to the greater access to talent. This is particularly true in fields such as IT, software engineering, customer service, and digital marketing. But not all countries are the same when it comes to the workers’ level of education and skillsets. Top outsourcing countries boast a strong, well-educated workforce adept in these areas. Best practices for outsourcing often require examining talent pools in combination with cost and language abilities. Countries that provide highly skilled workers available at low wage are notably the most attractive. And as part of the overall outsourcing solution for a business, Bold explores these issues in great detail.
When it comes to business outsourcing strategies, geographic considerations also play a part in decision-making. Off-shore outsourcing refers to partnering with countries beyond continental proximity while near-shoring partners closer to home. For some companies, this matters greatly. If outsourcing manufacturing, proximity could impact supply chain operations. But even for other business processes, being in the same time zone may be important. For others, however, offshoring offers advantages by expanding customer access. Some even provide 24/7 outsourcing services. Understanding this, best practices for outsourcing also requires making some determinations in this regard.
Political and Legal Considerations
One of the most important best practices for outsourcing demands research into the political and legal climates. For Bold, that means finding countries offering outsourcing talent in stable, democratic environments friendly to a company’s interests. For example, Vietnam is gaining momentum in supply chain outsourcing as of late. (Read more about Vietnam’s increasing role in global manufacturing in this Bold story.) However, it is communist in nature and is progressively aligning with Chinese operations. In contrast, the Philippines is democratic and recently formed a security agreement with the U.S. Of these two countries, the Philippines would be preferred because of the lower risk entailed. Similarly, countries that offer intellectual property and security protections within their legal structures are also preferred. Failing to include these investigations as part of one’s business outsourcing strategies could be risky.
Top Countries for Outsourcing
After taking all of these things into consideration, there are a handful of countries preferred with Bold’s outsourcing services. Two of the top regions for offshore outsourcing include India and the Philippines. India is a low-cost option with monthly wages in the nation averaging $424 a month. In addition, India is an English-speaking nation, has an extensive talent pool, and has few sociocultural barriers. Likewise, the Philippines also has a low average monthly wage at $885 and speaks English. In addition, however, the Philippines has a very favorably employment structures, traditionally excellent customer service, and a 97% literacy rate. And both countries are stable, democratic, and have strong U.S. relations.
Of course, some businesses prefer near-shore outsourcing, which may preclude using India or the Philippines. In this case, Brazil offers some clear advantages as part of business outsourcing strategies. In addition to having a solid IT infrastructure, Brazil also has a well-educated talent pool and offers bilingual capabilities. Mexico and Argentina are other good options with low-cost wages, bilingual opportunities that include English, and strong outsourcing infrastructures. And again, these nations are stable, democratic, and on good terms with the U.S. As you can appreciate, Bold does its homework when choosing outsourcing partners for its clients. By adhering to best practices for outsourcing, we as able to place our clients in the best position for success.