Cost arbitrage, almost single-handedly, led to the growth of the Global Business Process Management industry. In the initial phase, cost and headcount reductions were the most common reasons to outsource. Even today, with all the advances that BPOs have made by way of innovation, knowledge management, efficiency etc. cost remains a primary driving factor for enterprises to offshore work.

Direct Cost Benefits

The cost of hiring in offshore locations is lower. Using third parties or setting up your own capability center is an option that is available. There are multiple other models of engagement that have emerged to enable offshoring at more attractive terms for the enterprise as the industry has evolved and matured.

Indirect Cost Benefits

What happens when you offshore non-core functions? Your productivity and efficiency go up and this directly impacts your top and bottom line. The cost savings from outsourcing can be repurposed to fund revenue- generating programs of the company.

Flexibility in Servicing Customers not only makes you a preferred choice but also gives you an edge over your competitors. Offshoring operations to another location allow you to service your customers longer. By simply taking advantage of the time differences or by adjusting work shifts, gives you a much longer duration, sometime even 24X7, to stay engaged to your customers.

Infrastructure costs which include building rentals, IT and Networking, Power, and Connectivity, and which are way cheaper in Asia and other preferred offshore locations, also contribute significantly to an enterprises’ cost structure.

Finally, how can you discount the cost benefit accrued by tax exemptions, favourable policies, and incentives that many offshore locations accord to the enterprises.