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Offshoring Philippines – Business Rationales for Outsourcing

Offshoring Philippines are renowned for expertise in various business aspects such as Information Technology, call center services, project management and more. There are several desirable business rationales for outsourcing functions and task.  This post will reveal some of the rationales in-dept.

Operational Efficiency

Companies can achieve operational efficiencies plus competitive advantages by embarking on offshore outsourcing. The operational efficiency advantage does not only come from cost reduction, it is also a product of performance improvement of both existing people and resources.  In-depth study has shown that up to 50 percent cost savings is possible through outsourcing, and this huge savings go directly to operating profit. 

Increased Focus

As the operational efficiency improves through the expertise of the outsourcing vendor, the existing personnel tend to increase focus on business management and development. This re-focusing or increased focus on business management and development can bring about more than 5 percent increase in the organization’s revenue.
 Also, the increased focus enhances communication between the business and the technical sections – the end-outcome would be a proactive company that responds and takes action swiftly in line with the marketplace dynamics. Increased focus is one of the top benefits of employing offshoring vendors, either offshoring Philippines vendors or providers from other offshore destinations. 

Operating at Higher Level of Revenue without a Corresponding Increase in Operating Costs

This is very crucial, and an incentive worth embracing by choosing to outsource business functions. A company that opts for outsourcing would ultimately operate at an increased revenue level, yet the operating costs do not record a corresponding increase.

Maintaining Perspective Between Time and Budget

It is possible to reduce both time and budget via offshore outsourcing, this is particularly true about offshoring Philippines vendors or offshore providers from India. Also, time differential is another major factor in such scenarios, in addition to cost differential.  For instance, a company manager in America can assess an offshore project and advocate for changes while it is still daylight.  The offshore team (perhaps in India) receives the request at the close of the day American Time (which would be the beginning of the day in India) and makes the necessary adjustments. So, the following morning, the manager of the XX company in America would discover the changes have been implemented as he or she resumes duty. In other words, time zone difference is well-exploited, resulting in a 24/7 development cycle.

Competitive Advantage

Competitive advantage is also a big rationale behind outsourcing. When a company embarks on outsourcing, it is able to deliver products or services to the market faster. Also, development costs are kept within the budget.

Obviously, embarking on offshoring Philippines outsourcing or any form of offshoring comes with a lot of benefits.

Daven Michaels is an award-winning outsourcer and author of the book, ‘Outsource This!’ Daven has been honored more than any other individual or outsourcing organization. You can get more information on outsourcing by visiting


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