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Reading 24: Outsourcing onshore or offshore? - Coggle Diagram
Reading 24: Outsourcing onshore
or offshore?
Key drivers
'Cost reduction' according to the FCA
Amounting to '49% of responses'
1 The growth of outsourcing
Reasons
Improve focus
Increase variable cost element
Access to skills
Grow revenue
Improve quality
Conserve capital
Innovate
If the remaining 51% of costs are not reduced non of these reasons will be taken seriously.
Reduce costs
Originality
Hiring mercenaries
Hiring explorers
2 The risks of offshoring
Obvious risk 'distance'
Second issue 'currency'
Another concern 'legal system'
Political or economic instability
Language and culture
Damage to the brand
3 The assessment
The mitigate the inherent risks of offshoring, some business prefer to choose a destination closest to the core business or market.
It is advisable to choose an offshore location purely from a
The Philippines rates highly on language, infrastructure and cultural compatibility, but would have fewer skilled individuals, a slightly high risk
profile and less experience as an outsourcing destination.
As outsourcing can attract adverse publicity, it is important that businesses
have a clear understanding both of the savings and the risks.