Business process outsourcing, BPO, can help your company maintain streamlined business operations while cutting costs.

According to Forbes, outsourcing offers myriad benefits, from allowing you to concentrate time and energy on core competencies to encourage you to connect with high-value specialists.

Discover the different types of outsourcing in business and the benefits of each option below.

Outsourcing Options:

• Nearshore
• Offshore
• Onshore

Defining Nearshore versus Offshore versus Onshore Outsourcing

When researching outsourcing options, you will come across three main possibilities. Nearshore, offshore, and onshore. Here is what that means:

Nearshore: This means outsourcing to a company in a nearby or adjacent country that likely has similar cultural values and languages.

Offshore: This means outsourcing to a company located in a foreign country, which may have a different language and culture from your own. This is also called offshoring.

Onshore: This means outsourcing to another company located in your home region or country.

Benefits of Nearshore Outsourcing

Nearshore outsourcing is convenient because it means you'll be working with people geographically close to you, which means you'll likely be in the same time zone. Working across time differences can impede communication and hinder efficiency.

Nearshore outsourcing also means you won't have to struggle with language barriers, another communication hurdle.

All of this can add up to improved retention. Without these challenges, it's more likely that you'll be happy with your outsourcing solution and not have to change it.

Benefits of Offshore Outsourcing

"Outsourcing offers myriad benefits, from allowing you to concentrate time and energy on core competencies to encourage you to connect with high-value specialists."
Forbes

Offshoring may pose hurdles that nearshore outsourcing doesn't. For example, language barriers and time zone differences can be problematic. However, offshore outsourcing has its benefits.

In general, offshoring costs less. McKinsey reveals that for every dollar a company spends offshore, it benefits from 58 cents of net cost reduction in business operations. Meanwhile, you'll be able to pay offshore team members above their local market value, fostering loyalty.

Offshoring also opens up a global candidate pool. The world is your oyster, and you can collaborate with skilled individuals from every country imaginable to get the job done.

Benefits of Onshore Outsourcing

Onshore outsourcing is likely to be the most expensive of these three options. However, the advantages it offers are significant, often making it well worth the investment.

First off, you won't have to worry about language barriers. You can also be confident that your onshore workers will share the same culture, further avoiding communication troubles or misunderstandings.

Finally, when dealing with onshore workers, you don't have to worry about foreign regulations regarding issues like labor law. They will be subject to the same legislation as you.

Check out how we do offshoring.

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How to Choose: What’s Best for Your Business?

So, which of the above options is best? The answer is subjective. It depends entirely on your priorities.

You need to figure out what's more important to you and weigh the benefits of each option accordingly.

For example, if your number one goal is to reduce costs, offshoring may be your best bet. However, if a shared language, culture, and time zone are fundamental, onshore business process outsourcing may be preferable.

Whichever option you choose, make sure to shop around. Vet different vendors in each category and take your time picking the one that best fits your needs.

The Final Word on Outsourcing

The benefits of outsourcing can boost your company in many ways. The key to success is doing your research.

This guide offers a quick primer to your options and the benefits of each one. From here, you can start weighing options and researching vendors.