Concerns companies have about hiring offshore providers

Offshoring is big business. Thousands of companies around the world are taking advantage of the boom in recent years in the offshoring business, outsourcing their workforces, production lines, processes and even management out to another country in order to reap the multitude of rewards.

However, there are various risks, concerns and questions raised by this process of shipping out rather than staying put; and onshore versus offshore debates will rage on. But what are the advantages and disadvantages of offshoring and what are the pros and cons of hiring offshore providers?

Firstly, offshoring results in the use of workers and systems in another culture, in another country, for less money. Generally, customers and clients will initially be sceptical about the low costs involved in offshoring – for good reason. In the UK and the US, people and companies are paid for their work and services they provide related to how well and fast they complete them.

A low-paid worker will cut costs initially, but the lead time generated due to their inexperience and poorer skills will be ultimately realised in the final project cost – which could lead people to simply consider a more productive worker and a higher rate in the first place.

Nevertheless, this is not often the case when offshoring, as lower costs come for different reasons, such as lower rates of pay, cheaper overheads and a simplified supply chain.

Other problems which often arise include a lack of, or concern over, communication with offshore companies.

Of course, this can be remedied by installing communications systems and networks between companies, from the developers to the offshoring company to the client – using the English language as a common base.

Companies wishing to make sure their clients' needs are catered for need to address this situation.

And payment issues are also of concern. Clients will want to know how they can make payments to offshore developers and workers legally and safely – this will be a very different concept and involve different procedures to those experienced in the US or the UK.

But by using several methods of payment, such as cashiers' cheques, demand drafts, bank transfers, wire transfer, SWIFT and various online methods such as PayPal, the system can be arranged securely and easily.

While many concerns and doubts will continue to be widespread among firms not used to the offshoring concept, the rapid uptake in the system over recent years is proof that once certain issues are addressed and clients are reassured, the offshoring and outsourcing method can be highly effective and highly profitable.