Driven by competitive pressure to lower costs, offshoring continues its momentum as an option for companies looking to cheaper locales to manufacture products and offer services.
If done properly, offshoring is a business strategy that enables flexibility, scalability and lower costs. The path of offshoring has been established by the movement of manufacturing operations from western nations to Asia over the past 30 years. And companies looking to offshore services can note the success of the IT migration to India. The results are a series of success stories driven by intense media coverage.
Offshoring’s great challenge is balancing risks both home and abroad. The PwC report A Fine Balance: The Buying and Selling of Canada notes Canada that 2.4 million knowledge services jobs are being affected by global competition. Canadian companies used to doing business in North America must come to terms with offshoring risks including political issues, unanticipated tax consequences, underperforming vendors and non-compliance with local regulators. Companies new to the process often struggle to understand risks inherent in offshoring. If proper due diligence is not performed prior to offshoring, the decision can cause a loss of shareholder value, impair service quality, reduce customer satisfaction, dilute brand and decrease market share. Many companies often don’t have the internal capability and skills to navigate these issues.
How we can help
Offshoring or “Global Sourcing” is a strategic decision best made with a strategic advisor. As a global firm, PwC has experience in markets and industries worldwide. Contact a local Canadian dedicated sourcing professional across the country to discuss how PwC can help your company lower costs.
