Why offshoring independently is not viable for 99% of companies
Conventional offshoring (go to India and set up offices) is feasible only for MNCs, such as Dell, Shell, Microsoft etc. It is a productive practice for MNCs because they have a turnover of billions of dollars per year and they send large quantities of work. The cost and time invested by MNCs in setting up offshore offices in India is, undoubtedly, offset by the significant gains achieved from shipping large volumes of work.
Due to the cost, time, and effort involved in the logistical aspects of job shipping, however, 99% of companies cannot offshore. Some of the logistics that make offshoring unrealistic for 99% of businesses include:
Setting up a new unit abroad: i) leaving your country, ii) hiring/purchasing an office, iii) purchasing all hardware and office equipment, iv) researching the best location, v) investing in infrastructure, e.g. generators
Understanding a new culture: Where do you begin when it comes to setting up an offshore office in a completely foreign country? Furthermore, if one does not know the culture, customs, and practices of a country then executing even a simple task can cause great difficulty. Without cultural and local knowledge of how things are done in a country, it can be very intimidating to go to that country.
Recruitment of employees: Where and how would one recruit the most talented employees in a foreign country?
Quantity of Work: 99% of companies only want to employ between 1-50 employees. Most companies are looking to send remedial everyday work/back-office operations or outsource specialist/highly skilled professionals they can’t find or can’t afford back home. 99% of companies are not looking to send departments of 500 employees like MNCs. To ship between 1-50 positions via conventional offshoring means is simply not cost-effective and thus it becomes an unrealistic option for 99% of companies.
Unless a company seeks to ship hundreds of positions, offshoring is simply unfeasible. The gains a company can achieve from sending a handful of positions would be quickly offset by the costs involved in logistics of offshoring.
The SME Offshoring Solution
The solution for SMEs (small- to medium-sized firms) that are unable to offshore is to ship jobs to VE, which is India-based remote staffing solutions provider. Even SMEs can now ship jobs to India thanks to VE business model. This is because service providers do the job shipping so you don’t have to. A remote staffing solutions provider will offer you with the type of employee you want. The employee will work from the service provider’s office and will be equipped with all the hardware necessary to work remotely, i.e. PC, fast internet connection, phone with US number, etc. In addition, the employee will work exclusively for you and follow your instructions. The service provider will manage the employee on your behalf and take control of all the logistics. Hence, SMEs can now easily offshore to India like MNCs do.