IT offshoring is a proven strategy. Globally, IT enterprises have relied on offshoring for
software development, testing, network security, etc., and partnered with countries
that offer the resource, cost, and operational advantage. India is a global leader in this
regard. The country is the first IT offshoring choice for companies from the west!
Nevertheless, if you've been planning to shift your IT operations or projects to another
country, this IT offshoring guide that touches on the following aspects can help.
What is IT Offshoring?
IT offshoring or offshore outsourcing refers to shifting the whole or part of IT
operations to an external vendor in another country. Companies usually do it when,
- The cost of IT operations in their country is relatively high
- There aren't enough resources to handle a particular task in their country
- Operational, employment, administrative, etc., costs hamper profitability
- It isn't their core expertise, and when they want to focus on their business
Benefits of IT Offshoring
Many already know the benefits of IT offshoring. But for those who would want to have
a clearer idea of how IT offshoring can benefit them, here are five quick ones.
- Reduced Operational Costs
IT offshoring to preferred destinations like India enables companies to save up to 15-20
percent (figures may vary) of the operational costs. The most significant factor
contributing to these savings is resources available at a lesser price. The per-hour rate
of an Indian developer is lower than that in the US, Canada, and the UK.
Besides, companies don't have to look after employee administration and benefits like
insurance, taxes, etc. One cannot forget that such countries overheads are relatively
lower than those in developed countries.
- Availability of Top Tech Talent
Offshoring countries have abundant technology talent, which is in several million. For
instance, India is home to over five million IT professionals! The number is way higher
than the US, which has nearly four million.
- Extensive Experience
Countries that undertake IT offshoring projects have extensive experience across the
technology realm. They have highly experienced resources that can be assets while
handling tactical challenges and supporting strategic decision-making.
- Reduced Time to Market
Dedicated resources working on a particular project in a foreign company can help
reduce the time to market or, in other words, expedite the production part. It can help
companies gain a competitive advantage over those who insource everything.
- 24/7 Operations
Offshoring enables companies to do what they cannot do efficiently in their home
country. Operating 24/7 is one of them. Offshoring helps companies continue their
operations round the clock and expedite production. Of course, it incurs a relatively
high cost. But if a company is willing to pay, it can help them do more in fewer days.
IT Offshoring Models
Let's now look at some common IT offshoring models. Choosing the suitable model is
crucial from the viewpoint of optimizing your investment. Usually, the offshoring
company can help you choose the right one. But knowing some potential offshoring
models can help you know what to expect.
- Project-Based Offshoring
This engagement is confined to a single project. But it is practically viable for a long-
term project, where you gradually realize the savings. For short-term tasks, it wouldn't
be feasible to move operations to another country and bring it back once the project
ends. Besides, you wouldn't want to opt for project-based offshoring for highly
complex projects, where knowledge transfer and finding resources could be
- Dedicated Offshoring Team
Working with a dedicated team involves building a remote team that works exclusively
and full-time for you. It is beneficial for companies that have a lot to accomplish and
look to build long-term engagement. Hiring a dedicated team allows you complete
control over the project and more flexibility concerning scalability.
- Offshore Development Center (ODC)
You can also build an ODC, where you develop a full-fledged IT team in the offshoring
country. It is an effective model for large IT companies and startups, as it helps them
establish their presence in another country. Adopting the ODC model allows
development teams to operate under the client company's brand name. Companies
don't have to deal with third parties and potential IP conflicts in such a model.
IT Offshoring – Challenges
Potential challenges encountered while offshoring IT operations include the following.
- Finding the Right Resources
Finding and hiring the right resources is a significant challenge. The right talent
acquisition strategy and access to a broader talent repository are crucial.
- Managing Cultural Gaps
Offshoring to a foreign country involves massive cultural differences, especially when it
is about shifting operations from the west to the east, which is often the case. But
proper training and empathizing with each other in the initial days can help.
- Handling Time Differences
Time differences could prove to be a challenge and create chaos. But planning work
appropriately can help leverage time differences and optimize productivity.
- Project Control
Although offshored, companies would want to have complete control over their
operations. It depends on the contract terms and frequency of project monitoring.
Optimize Your IT Offshoring Investments with Trinesis
We hope this guide helps you make the right IT offshoring investment decisions. If you
want to outsource software, mobile app, cloud application, web development, etc., to
an experienced IT company in India, we've got you covered!
Our value proposition enables companies to optimize their IT offshoring investments
via an organized product design discovery approach.
Please write to firstname.lastname@example.org to learn more about our IT offshoring solutions.