Domestic Outsourcing

What is domestic outsourcing?

Domestic outsourcing, more commonly referred to as onshore outsourcing, is a strategic form of business process outsourcing where a company outsources its business functions to a third-party provider located in the same country where the business is headquartered.

Back office functions like customer service, IT operations, and accounting are usually the roles outsourced to these third-party providers.

Domestic outsourcing keeps a company’s core team focused on their main responsibilities, and it reduces the worry about additional employees’ equipment, benefits, office space, and so forth. It also helps save on costs while hiring a dedicated outsourced team with the right educational backgrounds for the job.

Domestic outsourcing vs. offshore outsourcing

Offshore outsourcing is the complete opposite of domestic outsourcing. It is the other form of a strategic solution that refers to when a company outsources its business functions to a third-party provider located in a far-off country, most commonly Southeast Asia.

The top outsourcing destinations in Asia include the Philippines, India, China, Singapore, Malaysia, Thailand, and Singapore.

Benefits of domestic outsourcing

While domestic outsourcing can still help businesses save money, clients won’t have as many savings as when they outsource offshore.

However, they can still enjoy the following benefits that domestic or onshore outsourcing provides.

Less time zone difference

Businesses hiring in their home countries can experience less to no time zone difference. With this, they can easily synchronize their in-house personnel with their offshore team for better collaboration.

Better communication

Since they won’t experience language barriers or cultural differences, clients and their outsourced teams have better communication and understanding at work.

Localized support

Companies can provide their customers with more localized support through their domestic outsourced teams. This gradually helps in improving customer experience and satisfaction better.

A different layer of security

Domestic outsourcing can help firms have another layer of security from intellectual property and other issues that may arise when hiring overseas contractors.

Long-term cost savings

As mentioned, businesses won’t have as many cost savings when they outsource domestically compared to their offshore counterparts. However, clients can notice having bigger savings in the long run out of their operations.

Services delegated through domestic outsourcing

While many businesses nowadays delegate the majority of their operations offshore, companies can still delegate some of their services strategically through an outsourcing company located within the same country.

Some of the services that can be outsourced domestically include the following.

Software development

Some startups choose to delegate software development to a local development firm or service provider.

Labor costs in these providers are usually the same as when they create an internal team. However, businesses get to save long-term on their resources and the hassles of intellectual property issues through this.

Logistics

Domestic outsourcing is also helpful for managing warehouses and shipments. They can tap a procurement provider that can get the best international shipping for them or a generalist BPO for inventory management.