Offshore Outsourcing

Offshore outsourcing is when an organization contracts with a third-party provider to conduct operations from an outside country in low-cost regions to reduce expenses and access global expertise.

Also called business process outsourcing (BPO), although BPO can also refer to onshore and nearshore outsourcing.

Related terms: Onshore outsourcing is when an organization contracts with a provider located in the same country as the organization. Nearshore outsourcing refers to outsourcing with providers based in neighboring countries.

Quick facts

• Function: Offshore outsourcing reduces operational and staffing costs while increasing service capacity with 24/7 availability. It improves performance via dedicated experts.
• Domain: Businesses of all sizes facing overwhelming demand and high financial pressures offshore operations to streamline processes and access global expertise at lower costs.
• Typical KPIs: Outsourced customer support teams measure performance by tracking key performance indicator metrics including
  • Abandonment rate (ABA)
  • Agent Utilization rate
  • Average Handle Time (AHT) 
  • Average Speed of Answer (ASA)
  • Cost per Call (CPC)
  • Customer Effort Score (CES)
  • Customer Satisfaction (CSAT)
  • Error rate
  • First-Call Resolution (FCR)
  • Net Promoter Score (NPS)
  • Quality Assurance (QA)

What is offshore outsourcing?

Offshore outsourcing is the practice of hiring a service provider based in a country different from one’s own to conduct business operations. BPO providers set up virtual or physical contact centers with the necessary agents, skill sets, processes, software, and hardware to carry out customer support, IT support, administrative tasks, HR and recruiting, and more with greater efficiency at reduced costs. 

Why offshore outsourcing matters / Benefits of offshore outsourcing

• Customer experience (CX): Offshore outsourcing aligns agent schedules with customer activity, particularly after business hours, extending support coverage at lower costs to the company and improving customer satisfaction with timely responses.
• Employee experience (EX): Offshore outsourcing enables companies to support and invest in the personal and professional success of their dedicated agents. Appropriate technology, support tools, and continuous training empower agents to achieve goals, take pride in their performance, and cultivate additional skills. Positive EX increases commitment to the brand, reducing agent attrition and improving agent confidence.
• Cost savings: Offshore outsourcing reduces operational, staffing, and overhead costs more significantly than onshore or nearshore outsourcing. Low-cost regions bring high potential for savings while connecting organizations with advanced technology and industry-leading strategies.
• Quality: Expert offshore outsourcing ensures peak performance by sourcing agents with expert skillsets, offering continuous agent training, and implementing automatic interaction scoring and data analytics for targeted improvement.
• Speed of Service: Offshore outsourcing improves an organization’s service speed by equipping the contact center with a full team of dedicated agents scaled to effectively and efficiently handle demand. Automations improve response time by handling routine inquiries and seamlessly routing customers to the appropriate teams.
• Compliance: Offshore outsourcing ensures strict regulation adherence by removing human error due to manual processes and overburdened teams. Offshore teams are well-trained in industry-specific laws and regulations. Compliance monitoring technology tracks conversations and flags potential issues for review, corrective action, or escalation, mitigating risk and improving compliance adherence.

How offshore outsourcing works in practice

Use cases 

• Inbound support: Offshore teams use a unified telephony system to handle inbound queries from phone, text, SMS messaging, and social media. Systems securely integrate with existing technologies to manage interactions and data in a unified platform, capturing historical and live data for more personalized insights.
• Sales: Offshore teams can boost sales performance by qualifying leads, setting appointments, and making other relevant customer outreach efforts.
• Workforce management (WFM): BPO providers manage offshore teams through a combination of advanced technology and human oversight in team leads and account managers. Monitoring programs, automated scheduling, and continuous agent coaching ensure compliant operations and employee success.
• Quality assurance (QA): Offshore outsourcing teams use interaction monitoring, sentiment analysis, agent productivity, risk management, compliance adherence standards, and customer feedback to score agent performance.
• Robotic Process Automation (RPA): Software robotics technology uses intelligent automation to perform repetitive tasks, eliminating back-office work such as data extraction, form completion, file integration, and more. Offshore RPA significantly reduces workloads, allowing internal teams to handle complex interactions.

Factors that influence offshore outsourcing

Operational

Volume Mix: Understanding how volume and support demands change according to inquiry channel and type helps offshore teams appropriately align workforces to specific requests.

1. Text, chat, phone, email, and social media request volumes vary according to industry. Performance expectations should be tailored to each channel. Offshore workforce management strategies should align agents’ time and skills with each channel for optimal performance.
2. The type of request also determines which team or agent a request is routed to, and service expectations should be tailored to appropriate standards. For example, billing and payment requests may have lower handle times than tech support interactions. Sales calls also have different purposes, stages, and flows with specific performance indicators.

Historical and live interaction tracking helps offshore teams forecast appropriate staffing levels to accommodate the mix of inquiry volume, channel, and type.

Seasonality: Expert offshore teams forecast busy season surges and slow season lulls and adjust staffing accordingly to achieve peak productivity and cost-effectiveness regardless of demand. BPO experts can allocate staff to different projects to avoid mass layoffs or excessive hiring.

Training: Offshore teams rely heavily on virtual training when a company is unable to send a representative to train on-site teams. While this can introduce gaps in understanding, expert BPOs implement proven methods for achieving desirable results.

1. Accurate translations of company materials communicate clear competency benchmarks, process guidelines, and performance standards to ensure consistent results.
2. Hands-on learning through gamified courses and real-scenario simulations boost agent learning, confidence, and speed-to-proficiency while streamlining training and onboarding times by allowing agents to complete courses on their own time.

Technology

Secure integrations of advanced technologies allow offshore teams to deliver world-class service. Cloud-based solutions can be implemented anywhere, anytime, and offshore outsourcing partnerships reduce software and hardware costs for organizations.

• Automatic Call Distribution (ACD) routes incoming calls to the most appropriate agent based on caller needs, agent skills, and availability. This reduces wait times, improves customer satisfaction, optimizes agent productivity, and ensures efficient workforce distribution. 
  • In offshore outsourcing, language capabilities, caller history, and availability are particularly important to personalizing service.
• Interactive Voice Response (IVR) menus allow callers to perform specific actions to get to the appropriate team. It also enables self-service by automating routine requests such as balance inquiries, appointment scheduling, organizational information, and more. IVRs expertly manage queues to reduce call overwhelm for offshore teams.
• Workforce Engagement Management (WEM) platforms virtually optimize the performance and productivity of offshore teams. WEM tools encourage motivation, streamline processes, improve service quality, track performance, and offer continuous coaching for elevated employee performance and satisfaction.
• QA platforms and tools monitor every interaction and score every call against established performance guidelines for transparent evaluation of each team member. Sentiment analytics tracks how customers feel about the service and proposed solutions, allowing for personalized support and more data-informed decision-making.

Policy compliance

Global customer support experts are familiar with local and industry-wide regulations, making policy adherence a core aspect of support strategies. Certain regulations require adjustments for offshore teams, such as specific sourcing solutions or adherence to laws local to the customers of a differing country. 

Offshore teams are compliant in a range of global policies, laws, and regulations.

Payment Card Industry Data Security Standards (PCI DSS) ensure the security of credit card transactions and protect cardholder data. Offshore teams accepting payments from Visa, MasterCard, American Express, Discover, and the Japan Credit Bureau can achieve PCI compliance by adhering to the 12 core requirements of PCI DSS: 

1. Install and maintain a firewall to protect cardholder data.
2. Change default passwords and security settings on all systems and devices.
3. Protect stored cardholder data and implement strong access control measures.
4. Encrypt transmission of cardholder data across open and public networks.
5. Use and regularly update antivirus software to protect systems from malware.
6. Develop and maintain secure systems and applications to address vulnerabilities.
7. Restrict access to cardholder data on a need-to-know basis.
8. Assign a unique ID to each person with computer access to ensure accountability.
9. Restrict physical access to cardholder data to authorized personnel only.
10. Track and monitor all access to network resources and cardholder data.
11. Regularly test security systems and processes to identify vulnerabilities.
12. Maintain an information security policy that addresses security requirements.

Health Insurance Portability and Accountability Act of 1996 (HIPAA) is a US law that protects patient health information (PHI), streamlines healthcare processes, and ensures individuals maintain health insurance coverage during job transitions. It enhances confidentiality and accountability in healthcare by establishing federal standards for the secure handling of health information.

Offshore teams must establish secure and robust systems and practices for handling PHI, such as encryption, access controls, and regular security audits. Regular agent training and risk assessments are essential for offshore teams handling PHI.

General Data Protection Regulation (GDPR) is a data privacy law by the European Union to protect the personal data of individuals in the EU and the European Economic Area (EEA). 

Offshore teams not located in these locations but handling personal data must follow the GDPR’s established framework for collecting, processing, storing, and transferring personal data.

Telephone Consumer Protection Act (TCPA) is a US federal law that aims to protect consumer privacy and reduce unwanted telemarketing. It regulates how businesses can contact consumers by phone, text, or fax, restricting the use of automated dialers, prerecorded voice messages, and unsolicited faxes without prior consent.

Offshore teams must follow these laws for US customers. A single violation can incur penalties, which add up if actions continue. Common violations include

• Calling outside of 8 am to 9 pm local (even with timezone differences)
• Using robocalls or auto-dialing systems without prior written consent
• Sending marketing texts without clear opt-ins
• Calling numbers on National and State Do-Not-Call lists
• Using third-party tools that don’t log consent properly
• Failing to honor opt-out requests within a reasonable period

Common pitfalls of offshore outsourcing 

The distance between organizations and outsourced offshore teams can introduce issues or errors in operations which, if left unchecked, have potential significant cultural, security, and business consequences.

Cultural and language barriers

• Problem: Customers seeking support can experience increased dissatisfaction and frustration if support teams struggle to understand them or accurately reflect a brand. Communication gaps increase handle time, wasting time and decreasing productivity. 
• Solution: Immersing agents in brand culture, voice, and branding trains them to consistently reflect the organization’s values and policies. Regular training, QA, personalized coaching, and accent neutralization technologies can improve understanding and performance and eliminate barriers.

Security and privacy

• Problem: The lack of direct in-person management of offshore teams can limit accountability and lower security adherence. Industry-specific regulations can also raise concerns if teams are not well-versed in local laws and regulations.
• Solution: Implement Workforce Management technologies that track agent behavior and QA technologies that score performance and compliance adherence. Implement robust security measures and continuously train agents on compliance-first strategies.

Time zone differences

• Problem: Collaborating with offshore teams can delay communications or deliverables as partners have to wait for teams and leaders to come online. This limits the amount of live or urgent support organizations receive.
• Solution: Plan ahead and share calendars to establish a routine that works for both parties.

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