TOP-5 offshore outsourcing

When deciding whether or not to outsource company processes offshore, many criteria play an important role. Each country has its own ‘specialty’. Based on our research we have composed a Top 5 of popular offshore countries.

India

India is by far the most popular offshore country in Asia for many work fields. No other country has such a broad portfolio as India; amongst others, it provides world-class HR services.

Advantages: India has decennia of experience with organisations that outsource company processes. Another important advantage is that the judicial system in India is very well-organised, which is a welcome  precondition for foreign companies. Moreover, most Indians are fluent in English.
Disadvantages: Cultural differences with Western countries make it harder for employees in India to meet the desired service level. In addition, the country’s wages are often subject to inflation.

China

China is currently the country with the highest growth in offshore outsourcing. The growth of the international market and logistic services plays an important role in this development. China is also becoming an increasingly important player in outsourcing technical projects, such as software development.

Advantages: Employees in China have a reputation for working hard and providing high quality services and products, especially concerning software development. Plus, in large cities many Chinese people also speak Japanese.
Disadvantages: Organisations in China, at least at this stage, have a lack of experience with large-scale outsourcing projects. In addition al-though the English language is starting to have an influence, it is not yet widely spoken.

Romenia

Romania is becoming increasingly popular thanks to the presence of highly educated technical personnel. At the moment Romania mainly provides salary-related administration services and server space for data storage. Countries that outsource many processes to Romania include the United Kingdom, the Netherlands, France and Germany.

Advantages: Costs are generally lower than in the West, highly educated personnel is widely available and there is a good understanding of Western culture.
Disadvantages: There are fewer suitable managers, which may be due to Romania’s socialist past. And al-though employees in Romania may be relatively cheap, their salary is nevertheless higher than that of employees in India.

North Korea

North Korea too has many highly educated IT professionals and has specialised in many IT fields, such as the development of embedded software for the telecom sector. North Korea is a nearshoring solution for countries such as Japan, China and South Korea.
Advantages: Staff costs are low and highly educated specialists are prevalent. At the moment, it is very popular in North Korea to have a career in the IT sector. Another advantage is that many North Koreans speak Japanese.
Disadvantages: The country is not easily accessible due to the communist government policy. North Korean organisations solve this problem by setting up office in neighbouring China. Another weak point is that internet connections are still mostly realised via telephone lines.

The Philippines, Hungary and the Czech Republic

Outsourcing is gaining popularity in a variety of countries; India is now outsourcing certain processes to countries like the Philippines and China.
Advantages: Lower costs and the presence of highly educated personnel. A good example of this is a Philippine company employing jurists and law-yers to investigate and analyse legal problems in America. Cultural similarities with Eastern European countries in partiular are a plus point.
Disadvantages: Outsourcing to Eastern European countries is not very profitable – a Hungarian call centre employee receives 25 % more wages than an employee in India.