In Switzerland, the service economy is still largely dependent on local players and manages to operate in a vacuum, to the delight of the national economy. The problems of relocating companies or services are still limited. Confidentiality concerns and the need to secure data produced by their services mean that most Swiss companies have to maintain costly in-house services. But this is becoming a burden, and the use of external companies is on the increase. A major local bank, for example, no longer hesitates to relocate some of its services to Poland.
Definitions
While many companies turn to outsourcing services to save time and cash, and focus on their core business, some may be tempted by offshoring.What are the differences between offshoring and outsourcing?What are the advantages and limitations? Outsourcing is the practice of entrusting a part of a service to a third-party company, whereas offshoring consists of having an external company carry out a task in another country. In the service sector, this is most often the case in French-speaking Maghreb countries, Madagascar or the English-speaking Philippines. Swiss companies find it more difficult to identify offshore service providers who work in German or Swiss-German, and this (along with data security) is a major obstacle to offshoring.
Comparative advantages of outsourcing and offshoring
In both cases, the objective is to save money and reduce costs internally, but in the case of outsourcing, we're mainly looking for support and help from another company for skills we lack. On the one hand, offshoring offers significant cost savings, but it also requires a dedicated department (or person) to manage the offshore service provider. The practice involves information transfer risks, geopolitical risks and sometimes language barriers. Outsourcing is a more expensive solution, but one which guarantees a comprehensive service from the service provider, access to scarce resources and a high degree of flexibility.
Conclusion ?
Finally, to develop a service on a very large scale, where cost concerns will be paramount, it is worth investing in an offshore solution, but this requires time, energy and involves risks. Once the investment is made, the financial gains are not negligible.
On the other hand, traditional outsourcing is best suited to one-off assignments or those requiring a minimum of confidentiality, and to save on the organization of an outsourced service, since your service provider will generally take care of everything, and won't take up any of your time.
Some companies specializing in outsourcing, such as Geneva-based DCS, offer a dual service: they have developed a structure in Chile to help companies enter the South American market and to offer secure offshore solutions.
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