Technical support is a critical component for companies across industries, especially in today’s rapidly evolving technological landscape.
For instance, generative AI models like ChatGPT can do a multitude of things, such as respond to customer inquiries, draft emails, translate text from one language to another, set reminders, and schedule appointments. However, people need help in figuring out the right prompts to maximize such technology.
Indeed, as innovation in technology continues to advance, businesses face the challenge of ensuring seamless customer experiences and resolving complex technical issues promptly. This is where technical support outsourcing emerges as a strategic solution offering numerous benefits.
Technical support outsourcing involves entrusting the responsibility of managing technical concerns and inquiries, troubleshooting, and problem resolution to external service providers. It’s a cost-effective alternative to employing technical support staff in-house.
In technical support outsourcing, the outsourcing organization obtains the services of a technical support outsourcing provider, to which it then routes all technical support inquiries and troubleshooting requests.
The outsourcing partner, meanwhile, ensures it has the technical support capacity (this can be provided by a few tech support staff or multiple teams) required to provide troubleshooting assistance and respond to the tech support concerns of the outsourcing organization’s clients and customers.
Technical support outsourcing can enhance operational efficiency, minimize costs, and deliver exceptional customer experiences.
By partnering with outsourcing providers, companies gain access to a highly skilled workforce, scalable support capabilities, and advanced technologies. This enables them to meet customer demands, improve service levels, and stay competitive in a rapidly changing market.
Technical support outsourcing can be done onshore, nearshore and offshore.
Outsourcing functions (in this case, technical support) to a third-party provider operating in the same country as the organization is the essence of onshore outsourcing. An example of this would be Microsoft in Redmond, Washington outsourcing its technical support functions to an agency in Miami, Florida.
When you outsource business functions to a third-party provider located in a neighboring or nearby country, you’re practicing nearshore outsourcing. It is nearshore outsourcing if Microsoft in Redmond, Washington outsources its technical support department to Tijuana, Baja California, Mexico or Medellín, Antioquia, Colombia.
Meanwhile, offshore outsourcing refers to outsourcing business processes to an outsourcing agency located in a faraway country with a time zone that is drastically different from the organization’s home country. Thus, it is offshore outsourcing if Microsoft in Redmond, Washington outsources its technical support functions to a business process outsourcing company in Makati, Metro Manila, Philippines.
The disparity in time zones and the greater distances distinguish nearshore and offshore outsourcing. While Medellín in Colombia is only two hours ahead of Redmond’s time zone, Makati in the Philippines is 15 hours ahead. Additionally, while Medellín is 3,954 miles (6,363 kilometers) away from Redmond, Makati is over 6,600 miles (more than 10,000 kilometers) away by plane.
A company can have a technical support workforce located in the same country with onshore outsourcing. This comes with the advantage of staff that speaks the same language and the same or very similar time zones.
Caveat: In the case of the United States, the time differences between an organization’s headquarters and an outsourcing provider’s location may span several hours. In some instances, they may even have more of a time zone disparity than if the organization outsourced to a nearshore location. As a case in point, Medellín in Colombia (a nearshore outsourcing location for the United States) is only two hours ahead of Redmond, Washington, while Miami, Florida is actually three hours ahead.
The geographical proximity and the time zone similarity mean convenient access and real-time communication between the outsourcing organization and the outsourcing provider. There’s also no cultural barrier.
The disadvantage, however, lies in personnel costs. A U.S. company outsourcing to another U.S. company operating on U.S. soil means paying almost the same salaries as one would have to pay if hiring tech support staff in-house. In other words, onshore outsourcing can be expensive.
Similar to onshore outsourcing, the nearshore option provides a time zone advantage. As illustrated earlier, a nearby country can provide tech support at a similar time zone as the outsourcing organization’s customers.
For instance, even though Microsoft headquarters are in Redmond, Washington, which observes Pacific Standard Time, it operates from 8:00 a.m. to 8:00 p.m. Central Standard Time (CST).
Incidentally, Medellín is just one hour ahead of Central Standard Time. With Daylight Saving Time — Central Daylight Time (CDT) instead of Central Standard Time — this one-hour difference becomes irrelevant as the U.S. CST clock is brought one hour forward.
Thus, outsourcing to a nearshore location means full-service capacity during the organization’s business hours. Nearshore outsourcing also allows an organization to take advantage of geographic pay differentials between countries.
That said, nearshoring can come with cultural and language barriers.
With offshore outsourcing, companies can enjoy the most labor and operational cost savings among the three outsourcing options.
For instance, Emapta estimates that the average all-in annual salary of a tech support specialist in the Philippines is $16,548. That’s only 12% of Indeed’s $54,633 estimated annual salary for the same role in the United States.
Even with all other costs added in, Emapta says outsourcing to the Philippines can allow a U.S. company to cut its operational expenses by up to 72%. These savings stem not only from salary differentials but also from the significantly lower cost of real estate and infrastructure in the Philippines as well as the tax incentives available to organizations outsourcing to the country.
Like nearshore outsourcing, language and cultural barriers are pertinent concerns with tech support outsourcing offshore. However, if you outsource to a destination like the Philippines or Singapore, countries with excellent English proficiency and a Western-compatible culture, these concerns become less significant. With training, such issues become virtually nonexistent.
The time zone difference, meanwhile, is not a problem as outsourced staff in offshore locations work according to the outsourcing organization’s preferred time zone. Business organizations can even leverage the time zone difference to offer their clients and customers 24/7 tech support.
The decision to opt for onshore, nearshore, or offshore technical support outsourcing is a strategic choice that should align with the unique needs and goals of your business.
Onshore outsourcing provides the advantage of proximity, allowing for easier communication and cultural alignment, but it tends to be costlier compared to other options. Nearshore outsourcing strikes a balance between proximity and cost-effectiveness. The overlapping time zones can be particularly beneficial for some — say, an air charter company that offers operator-to-operator dry leasing in the same region.
Offshore outsourcing provides significant cost savings and, consequently, the ability to scale operations rapidly. The typical offshore outsourcing challenges related to time zone differences and potential language and cultural barriers should not be a concern when outsourcing to destinations like the Philippines, where outsourcing agencies operate in the outsourcing organization’s preferred time zone and have a large pool of skilled, English-speaking professionals with Western-compatible culture and values.
Ultimately, whether you choose onshore, nearshore, or offshore technical support outsourcing, the goal remains the same: to leverage external expertise and resources to enhance operational efficiency, deliver exceptional customer experiences, and gain a competitive edge in the market. The option that can best give you all these would be the right fit for your business.