What is Offshoring?
A definition of Offshoring
“Offshoring is the practice of relocating business processes or services to another country to reduce costs or take advantage of favorable economic conditions.”
Business Glossary > What is Offshoring?
Examples of Offshoring in a Sentence:
Many companies use offshoring to save on labor costs.
Offshoring can help businesses access a global talent pool.
The company benefited from offshoring its manufacturing operations.
Why is Offshoring Important in Business?
Offshoring allows companies to cut costs, access skilled labor in different regions, and improve their competitive edge. However, it requires careful evaluation of risks such as political instability and cultural differences that may impact operations.
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Associated Terms
Here are some associated business terms and synonyms for “Offshoring”:
- Global Outsourcing
- International Relocation
- Cross-border Services
IBM Offshoring
IBM has offshored many of its back-office operations to countries like India and the Philippines to leverage lower labor costs and specialized skills. This strategy has been significant in enabling IBM to maintain competitive pricing and profitability.
Final Notes on Offshoring
Businesses should consider the following factors before offshoring:
- Cultural differences and language barriers
- Political stability
- Impact on domestic employment
These insights will help businesses effectively manage offshoring strategies.
This has been a definition of Offshoring meaning.
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