OFFSHORING: TRANSFER YOUR OPERATIONS CLOSER TO CUSTOMERS
Offshoring differs from Outsourcing in that you own, manage and control your IP, knowledge and corporate intelligence, yet can still benefit from the low operating costs, proactively manage Forex risks, get closer to customers and become part of integrated supply and procurement chains. Additional benefits related to FDI incentives such as duty free imports or income tax holidays may also be available.
Offshoring progresses by establishing a Foreign Affiliate and developing a Global Value Chain (GVC) by transferring lower end, repetitive tasks, for example data entry, GIS, or CAD drawing. Then as capacity and need develop, more senior tasks would be transferred from head office, for example sales and support, new product development, engineering, design, R&D, IT, and project control and management.
Net cost savings typically range from 50% to over 80% depending on the function and organizational structure. In many cases, the startup and initial operating cost of the offshored office is offset by the savings gained in no longer needing an international sales representative.
- It is often less expensive to create, staff and outfit a new modern facility offshore, than upgrade an existing facility in Canada.
GVC provide access to low cost production that can confer benefits to the entire organization
Forex risk management and potential tax holidays and other FDI incentives
Access to low cost, highly skilled professionals that can be retained in a downturn
Provide crucial 24/7 sales & service to the local market, eliminates the need for a sales rep.
XPM can help set up your offshoring office and obtain maximum value for tax incentives and operational optimization.