Outsourcing vs Offshoring

John O'Shea

Lead generation is a vital part of every marketer’s business strategies. 85% of B2B marketers place great emphasis on lead generation as a major goal of their content marketing campaigns. Even then, it requires time and effort that you’d rather invest in other business activities, like strengthening the onboarding process.

In this article, we help you understand everything you need to know about outsourcing and offshoring and how you can leverage them to supercharge your lead generation efforts.

What is outsourcing?

Outsourcing entails a company delegating an entire business function to an external organisation.

Outsourcing is a proven strategy you can tap into when you want to improve your business operations. In 2018, Statista put the global outsourcing market at $85.6 billion. Companies outsource talent from developing countries to gain benefits they’d otherwise not attain in-house and free up time to focus on internal business activities.

In the B2B world, lead generation outsourcing means having a healthy sales pipeline with quality leads by leveraging an external lead generation company to drive leads for your sales team.

Although your company should generate demand for services or products internally, tapping into multiple lead generation methods and channels helps to gain more leads and strengthen your demand generation efforts.

Benefits of Outsourcing

When you outsource your business operations, it increases your competitive advantage. Some benefits of outsourcing your business process include:

• Access to special talent

Outsourcing gives you access to the right pool of skills for your business needs, even in the face of emerging technologies and industry trends that you’d struggle to match when relying on an internal team.

• Cost savings

Outsourcing work gives you access to cheaper labour, thus you’re able to lower costs and increase your profits as you avoid those business processes that cost you more money.

• Better efficiency

When you go the outsourcing way, you enjoy flexibility in scaling down or up without wasting effort and time in the training and hiring process.

Risks of Outsourcing

Certain risks are associated with outsourcing. First, it can be a challenge working with a third-party entity on business activities that require thorough knowledge and understanding of your business processes. Over-reliance on third parties is another risk, as your sales and marketing teams may disconnect from the goal because of ineffective communication or language differences.

When you outsource the services of an external organisation in a different country, you must share proprietary information with the vendor. This can sometimes result in intellectual property risks. Lastly, when you outsource, you may sometimes have less control over the process of execution. This can cause discrepancies in attaining your marketing goals.

What is Offshoring

Offshoring involves the relocation of part of your business operations or processes to an offshore location, usually another country. In most instances, companies in the developed world outsource services from developing countries to reduce costs.

Benefits of Offshoring

The biggest motivation to offshoring for most B2B organisations is being able to cut on costs. However, there are other benefits that include:

• Offshoring means access to affordable specialised skills. Working with an offshoring company gives you the opportunity to access a pool of highly specialised talent.
• Lighter regulations and rules. The cost of outsourcing activities in some foreign countries is much less because of better rules and regulations.
•Low tariffs and taxes. Many countries have a friendly economic policy that offers cost saving opportunities through tariff and tax relief.

Risks of Offshoring

The risks of doing work offshore are more like those of outsourcing. They include:

• Quality checks
• Cultural and social differences

What are examples of offshoring?

WhatsApp is a good example of offshoring in action. Before its launch in 2009, the company had its software development functions in Eastern Europe. They relied on offshore talent to provide design solutions and perform core software development functions for their app. The motivation for this was to allow their team of in-house engineers to focus on client related tasks before launching the app.

Outsourcing vs Offshoring

Knowing the difference between outsourcing and offshoring will help you make strategic decisions for your B2B business. Here are three key differences:

1. Outsourcing involves the transfer of specific business activities to another organisation (a third party provider) thus leveraging a certain level of specialisation. On the other hand, by offshoring you move your organisation’s business to a different country.
2. You can outsource locally and internationally while offshoring is strictly done internationally.
3. The goal of outsourcing is to focus on the core activities of your business. On the contrary, the motivation behind offshoring is minimising costs.

Which is better – outsourcing or offshoring?

Both outsourcing and offshoring are effective strategies that you can tap to take advantage of their distinctive features to ramp up your revenue by reducing costs, converting hot leads into customers, and improving your customer journey.

Wrapping up…

When you outsource your lead generation process, you’ll tap into the benefits of having professionals on board, so you focus on other areas of your business. Outsourcing will not only help in improving the quality of your leads but also save you time and money while boosting the morale of your sales team.

Book a meeting with Growthonics today and see how outsourcing can help your ROI and drive more leads.