The Disadvantages of Offshoring

286 Words2 Pages
Perhaps the greatest benefit of offshoring is the cost advantage it produces, which directly affects the company's bottom line. In tight fiscal situations, any savings in operating costs will contribute toward the company's sustenance and growth. Companies in recession segments sustain themselves and grow through innovation. Lower operating costs means they have more money to invest in innovation, resulting in a stabilized domestic workforce. In the service sectors, the cost saving from offshoring enables companies to create new service lines, many of which had been deferred for want of investment. New services increase customer satisfaction and become new revenue streams, as well as growth paths for companies. The geographic nature of offshoring brings its own advantages. It helps the company expand its reach, thereby helping the company grow. This growth mitigates any negative effects of offshoring. Offshoring also helps a company be closer to its global customers, thereby providing appropriate offerings to its regional market and ensuring speedier problem resolution. Developers and support personnel in the relevant geographies have a better understanding of customers' needs, regulatory compliances and regional preferences, and can better implement the product or provide the service. In addition, offshoring alleviates problems created by time differences, enabling companies to support remote customers too in a virtual 24-7 operation. For companies with constrained resources, offshoring also offers better utilization of capital investments through remote usage in multiple time zones. The key to offshoring success is to exploit its advantages through a well-planned and articulated proposition that looks at the business from multiple dimensions, rather than as a simple cost-reduction exercise. As Franklin D. Roosevelt once said, "The only limit to our realization
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