Why is offshore IT a performance lever used by companies?
Global competition is intensifying for many companies. More and more companies are looking to outsourcing and offshoring their IT as a way to reduce costs and streamline operations. Outsourcing is when a company hires an outside organization to perform specific tasks or provide services. Offshoring means that a company delegates its tasks to another company located abroad.
Working with experienced outsourced professionals helps companies to:
- Overcome productivity challenges 💪.
- Integrate operations.
- Rely on 👥 various additional resources that may be lacking internally.
From marketing to recruiting to operations, offshore IT outsourcing allows companies to work smarter 🧠.
In this article, we’ll look at how offshore IT boosts your company’s bottom line.
Outsourcing VS offshore IT: what is the difference?
These terms are often confused or misinterpreted. Although they can sometimes be used interchangeably, there is a distinct difference between outsourcing and offshore:
Outsourcing: This means delegating IT tasks (software development, application maintenance, cybersecurity management…) to a third party, which may or may not be located abroad.
It is possible to outsource to a provider in the same country. For example, a company located in Paris can hire a digital transformation firm located elsewhere in France to manage the creation of its website instead of entrusting this work to its own staff.
Offshore: This is when a company relocates some or all of its operations overseas, usually to less developed countries where labor and resources are cheap.
It is possible for a company to set up offshore operations without outsourcing these processes to a third party. For example, a company can move its call centers to Morocco to serve its French customers.
Offshore IT allows companies to access talented engineers and developers internationally. But this is not the only reason for companies to use offshore IT.
𝕐𝕠𝕦 𝕨𝕒𝕟𝕥 𝕥𝕠 𝕠𝕦𝕥𝕤𝕠𝕦𝕣𝕔𝕖 𝕪𝕠𝕦𝕣 𝕀𝕋 𝕕𝕖𝕧𝕖𝕝𝕠𝕡𝕞𝕖𝕟𝕥, 𝕓𝕦𝕥 𝕪𝕠𝕦 𝕕𝕠𝕟’𝕥 𝕜𝕟𝕠𝕨 𝕙𝕠𝕨 𝕥𝕠 𝕘𝕠 𝕒𝕓𝕠𝕦𝕥 𝕚𝕥? 𝕐𝕠𝕦 𝕒𝕝𝕣𝕖𝕒𝕕𝕪 𝕨𝕠𝕣𝕜 𝕨𝕚𝕥𝕙 𝕒𝕟 𝕀𝕋 𝕠𝕦𝕥𝕤𝕠𝕦𝕣𝕔𝕚𝕟𝕘 𝕔𝕠𝕞𝕡𝕒𝕟𝕪, 𝕓𝕦𝕥 𝕪𝕠𝕦 𝕒𝕣𝕖 𝕟𝕠𝕥 𝕤𝕒𝕥𝕚𝕤𝕗𝕚𝕖𝕕? 𝔹𝕠𝕔𝕒𝕤𝕒𝕪 𝕚𝕤 𝕥𝕙𝕖 𝕤𝕠𝕝𝕦𝕥𝕚𝕠𝕟! 𝔼𝕩𝕡𝕖𝕣𝕥𝕤 𝕚𝕟 𝕠𝕗𝕗𝕤𝕙𝕠𝕣𝕖 𝕀𝕋 𝕠𝕦𝕥𝕤𝕠𝕦𝕣𝕔𝕚𝕟𝕘, 𝕨𝕖 𝕡𝕣𝕠𝕧𝕚𝕕𝕖 𝕪𝕠𝕦 𝕨𝕚𝕥𝕙 𝕒 𝕔𝕠𝕞𝕡𝕝𝕖𝕥𝕖 𝕥𝕖𝕒𝕞 𝕠𝕗 𝕙𝕚𝕘𝕙𝕝𝕪 𝕢𝕦𝕒𝕝𝕚𝕗𝕚𝕖𝕕 𝕕𝕖𝕧𝕖𝕝𝕠𝕡𝕖𝕣𝕤, 𝕣𝕖𝕒𝕕𝕪 𝕥𝕠 𝕨𝕠𝕣𝕜 𝕖𝕟𝕥𝕚𝕣𝕖𝕝𝕪 𝕠𝕟 𝕪𝕠𝕦𝕣 𝕡𝕣𝕠𝕛𝕖𝕔𝕥 𝕨𝕚𝕥𝕙𝕚𝕟 𝟜 𝕨𝕖𝕖𝕜𝕤.
Why do companies use offshore IT?
1. To save money
Many companies and articles talk about reducing expenses through offshore. But what is the reality?
In the U.S. and Europe, hiring local talent can be expensive. First, because the cost of living is high, and second, because the qualifications and credentials warrant a salary above the national average.
However, payroll is only one aspect of the overall cost of building a software development team.
Among the expenses generated, we can count:
- The recruitment process.
- Administrative management.
- The premises.
- Hardware equipment.
- Other employee benefits.
Creating a fully in-house team is therefore 🤑 very expensive, especially in cities with a high cost of living, such as Singapore, Paris, Sydney, London and New York.
Offshoring and team building in countries like Vietnam and Madagascar can 👍 significantly reduce costs. Because the standard of living is much lower in these countries, you can hire an equivalent workforce at a cheaper rate ☺️.
2. To produce faster
The time companies spend trying to speed up their development process in-house can be reduced by going offshore.
By delegating some or all of the IT management and development to a company that specializes in offshore IT development, companies become able to deliver their products to market much faster and generate profit faster.
3. To be more competitive
Development processes can be complex. You can never be sure of the time or resources needed to complete a digital product. An offshore IT development company can increase the number of developers on a project and speed up the delivery time so that your company is always among the first in the market.
In addition, most offshore IT development companies specialize in the best technologies and skills, which is rare among in-house developers. So you will be able to take advantage of the wide range of expertise 🎨 of these developers through offshore IT.
4. To limit development risks
When you build software in-house, you have to take responsibility for what can go wrong during development or deployment. On the other hand, when you partner with an offshore development company, it is their responsibility to test the product and ensure a seamless deployment 😉.
5. To save time
When you delegate your IT development services needs offshore, you only have to focus on your core business.
Of course, with the increase of companies offering offshore IT services, you are faced with a multitude of providers to consider and filter. So you need to carefully choose the one that can give you the results you are aiming for. A good provider can get you a whole team of software developers within 4 weeks and launch your project as soon as possible.
That’s our 💛 promise at Bocasay. No matter what your IT development or management need is, we provide you with a full team of expert developers quickly through our vast talent pool located in Vietnam, Madagascar and Mauritius. Contact us today!