The article discusses the types of business process outsourcing by geographical location.
Summary:
- Onshore: Same country, easier oversight, but higher costs.
- Nearshore: Nearby countries, cost savings with similar time zones.
- Offshore: Distant countries like the Philippines, major cost savings, strong compliance, and scalability.
The global business process outsourcing market was valued at USD 328.37 billion in 2025 and is projected to reach USD 695.77 billion by 2033, growing at a CAGR of 9.9%.
The global business process outsourcing (BPO) market is composed of external or third-party business process outsourcing providers located either onshore, nearshore or offshore. Learn more on these business process outsourcing strategies that contribute to the growth of global business process outsourcing:
Onshore Outsourcing
A type of business process outsourcing by geographical location is Onshore Outsourcing. Onshore Outsourcing is a type of strategy where businesses decide to outsource to a provider located the same country.
Working with an onshoring provider lets businesses tap onshore talent pool and removes the need to adjust to time zone differences in company operations and differences in culture.
Also, since onshore business process outsourcing providers operate in the same country as that of the business, these providers are subject to the same compliance and operating controls in place, such as certifications in PCI-DSS, SOC-2 and HIPAA, or the General Data Protection Regulation (GDPR) covering all European Union members, to effectively protect the interests, security, availability, processing integrity, data and privacy of clients.
Onshore Outsourcing is convenient for businesses planning to outsource for the first time. A drawback is that the provider’s services roughly cost the same since both the business and the onshore provider operates in the same country, which translates to lesser savings.
Nearshore Outsourcing
A second type of business process outsourcing by geographical location is Nearshore Outsourcing. Nearshore Outsourcing is when a business decides to outsource to a provider located in a
neighboring country. Businesses primarily outsource nearshore for lower overhead and decreased costs.
In fact, a Deloitte Global Outsourcing Survey in 2020 found that 87% of IT businesses considered nearshore outsourcing to cut costs.
Like onshore outsourcing, nearshore outsourcing also decreases the need to deal with concerns on cultural differences, especially when within the same continent. Compliance and time zone differences may exist but are only minimal.
Offshore Outsourcing
The last type of business process outsourcing by geographical location is Offshore Outsourcing. Offshore outsourcing lets you tap into the global talent workforce.
As the name implies, this is when a business decides to outsource to a provider located in a different country. Outsourcing business functions to global outsourcing destinations such as the Philippines can lead to 60% lower overhead as well as decreased costs.
Top business process outsourcing destinations such as India and the Philippines are home to top customer service outsourcing and business process outsourcing companies. In fact, the Philippines remains one of the world’s most established BPO destinations. According to the IT and Business Process Association of the Philippines (IBPAP), the country’s IT-BPM sector closed 2025 with approximately $40 billion in export revenues and a workforce of 1.9 million workers, growing faster than the global industry average.
There are a number of established offshore providers compliant with data requirements specific to the business’ operating controls and are capable of securing confidential or private data entrusted to them.
Connext Global Solutions provides High-quality Business Process Outsourcing Solutions
Connext Global Solutions is an offshore customer service outsourcing and business process outsourcing partner with industry-leading staffing solutions. The company provides business process outsourcing solutions to companies looking to streamline operations, increase the bottomline, and unlock growth.
Connext provides world-class service to our clients standing by our 100% client satisfaction claim. This is backed up with over 350 quality, productivity, and utilization customer service and business process metrics per client, transparent and cost-effective pricing system and consultation sessions. There is a 60% reduction in the client’s average cost through outsourcing services via Connext.
Industries Connext Caters to:
1. Healthcare Providers
2. Distribution
3. Telecommunications
4. Title and Escrow
5. Property Management
6. Accounting
7. Banking
8. Technology
9. E-Commerce
10. Retail
11. Construction
12. Professional Employer Organization
13. Insurance
Connext Global Solutions powers small to medium businesses by hiring, building, training, and managing offshore remote teams.
Connext Global Solutions handles talent acquisition, management, and training done in close coordination with the client. The company actively sources required offshore talent.
Partner with Connext and receive:
- Geographically diverse talent
- 100% virtual recruitment and employment process
- Productivity, utilization, and quality monitoring
- Dedicated account management
- Standing IT support
- Talent management and employee engagement
Connext Global Solutions provides compliant custom offshore staffing and process solutions to improve the productivity, cycle time, accuracy, and scalability to improve customer experience. Partner with Connext today.
Frequently Asked Questions
1. What are the three types of outsourcing by location?
The three types are onshore, nearshore, and offshore outsourcing.
2.What is onshore outsourcing?
Onshore outsourcing means working with a provider located in the same country as your business.
3.What is nearshore outsourcing?
Nearshore outsourcing is partnering with a provider in a nearby or neighboring country.
4.What is offshore outsourcing?
Offshore outsourcing is hiring a provider in a distant country, often to reduce costs and access global talent.
5.Which outsourcing type is the most cost-effective?
Offshore outsourcing is typically the most cost-effective, offering significant savings compared to onshore and nearshore options.
6.What are the benefits of onshore outsourcing?
Onshore outsourcing offers easier communication, no time zone differences, and strong regulatory alignment.
7.What are the advantages of nearshore outsourcing?
Nearshore outsourcing provides lower costs than onshore and easier collaboration due to similar time zones and culture.
8.What are the benefits of offshore outsourcing?
Offshore outsourcing offers lower labor costs, access to a large talent pool, and scalability.
9.What are the risks of offshore outsourcing?
Common risks include time zone differences, communication challenges, and cultural gaps.
10.How do companies choose between onshore, nearshore, and offshore outsourcing?
Companies choose based on their priorities, such as cost, control, time zone alignment, and access to talent.
