Offshoring for Large Corporations
Large companies need to constantly be on the lookout for opportunities to lower their costs. One of the best ways of doing this is by offshoring their business processes to a low cost geography. Such a move provides such tremendous cost savings that it instantly becomes a strong competitive advantage. We would go so far to say that if your competitor is offshoring and you are not then you will likely find yourself priced out of your market in the near future. Large companies will often contemplate the following options:
- Establish an offshore subsidiary or captive. In this scenario, you will enter the new geography and establish your own local corporation. This typically requires 6 to 9 months of due diligence and comes at considerable initial investments. The big benefit is that the offshore operation is fully owned and controlled by your company.
- Offshore Outsourcing. In this scenario, you will run through a vendor selection program to find the best possible local provider and enter into a services agreement whereby the provider will take on delivery responsibility over a number of your business processes. This is typically faster than setting up a captive but the margins of the provider make this model more expensive and you are giving away control to a third party.
Delivery Models for Large Corporations
Our Virtual Captive services enable you to establish your own custom-built offshore operation in the Philippines consisting of your own dedicated office space, workflow infrastructure, and talent all operating from within MicroSourcing but still very much in your own control.
If it is essential that you own your offshore operation then we can enter into a joint venture structure whereby we largely follow the virtual captive service delivery model with the main difference that all talent and/or assets are in a joint venture corporate entity.
The Optimized Offshoring Model
MicroSourcing serves a number of very large multinational corporations. They do a wide variety of things but they generally have one thing in common: they need to have a great deal of operational control over their offshore operation. They do not simply want to outsource the work to a third party provider, they want to have great transparency and be able to steer what happens on a day-to-day basis. For such clients, MicroSourcing is the perfect provider as we are probably the only sizable provider that specializes in these types of deal structures. Most of our larger clients approach us because they want to operate in the Philippines and their typical thought pattern is that the only way to do so is by establishing their own Philippines-based company. During our meetings, we open their eyes to the obvious benefits of our virtual captive model and the two variations we offer: a joint venture and a build-operate-transfer agreement. After signing a virtual captive deal with us, clients will typically change their mind and decide to just keep their operations within MicroSourcing. In most cases, it just does not make economical sense to transfer the operation to their own Philippine company and they love how they can just focus on their operations and not have to worry about anything else. We basically enable them to operate in the Philippines at the lowest possible costs and without any kind of hassle.