Offshoring can be thought of as an extra hand for your business. When you start outsourcing various aspects of your business, you begin to switch from a people-focused model to a system-focused model. Companies are getting comfortable outsourcing tasks as it allows them to take advantage of the lower costs and become efficient at the same time. There are many advantages of offshore outsourcing, and companies are starting to have more confidence doing this. More than 60% of the total outsourcing market is composed of IT businesses, yet the industry itself faces some serious accusations. In spite of the misconceptions and bad reputation, offshore outsourcing has never been so popular like recent years. What does that tell us?
Let’s have a look at some stereotypes about offshoring web development and data that proves that those misconceptions have no ground at all.
1. Illegal Companies Do Offshore Outsourcing
This is probably the most frequently discussed misconception about offshore companies. You have to keep in mind that every industry has good and bad business within itself. But you cannot judge a whole industry by the bad examples. Different parts of the world have their own regulation; one standard rule might not be the case for everyone. But when it comes to the web development industry, everyone is following the same standard.
But keep in mind that there are some questionable companies who don’t have an office or standard working procedure. So in order to keep yourself safe and to stay within the legal bounds, you have to be familiar with the company you are outsourcing your job to. If you have not collaborated with them before, do some research on the company.
- What is their working condition?
- Company’s business structure?
- Can they handle your project or not?
- How many workers do they have?
- What type of projects they generally do or have done in the past?
- Companies they have worked with before (collect some reviews from those companies)
2. Offshore IT Projects are Out of Your Control !!!
This is an obsolete reason in the offshore outsourcing industry. Nowadays people are always connected with each other, thanks to modern media and communication apps. No matter what the distance is, you are always one click away from your team. It is always good practice to know full details about your team so that you can get an idea of what you should expect from them. Project management tools can be very helpful and necessary in order to get things done in a structured way.
There are some awesome project management tools in the market.
- Active Collab
- Zoho projects
But the software cannot do 100% of the work. Take a look at some of the points mentioned here in order to manage your team fluidly. You can always come up with new system that will suit you more.
- Keep a middle man who can report to you directly
- If possible, pay them a visit
- Give them a surprise day off once in a while.
- Do mention their good work
- Mix and match work intensity
- Keep track of your time to understand who is working better in your project team. (oDesk, Elance trackers)
3. Requires Substantial Capital
This is undoubtedly the most ridiculous reason not to offshore. The core concept of offshoring is reducing cost. Some processes would cost you a substantial amount of money were you to do it in-house; it would cost you a lot less if you simply outsourced it.
“With an annual growth rate of 6.5% until 2017, average annual IT outsourcing investment has reached almost 25% of total IT spend.”
Some people argue that there are hidden costs in offshore projects. But the blame for such practices cannot be imposed on one party. Suppose, a client company demands a new feature in their e-commerce site in the middle of a project which was not included in the initial agreement. In such situation, what can a service provider company do? Often time they hire new developers in order to finish the project in time and as a result the project price would naturally increase.
So what can you do as a client to make this a win-win situation –
- First of all, you have to be certain about your requirements before signing the agreement.
- Get an idea about the whole cost scheme (both the service you are taking and not taking) of your service provider company
- Keep a shared spreadsheet of your cost and tell your service provider to update that time to time, if needed. ( This may seem unprofessional, but it will give you results)
- Make a solid agreement and make sure you are thinking it through.
4. Select the Lowest Price Possible
The purpose of offshoring is cutting off cost. But it is wise to not overdo it. When companies try to find the lowest service provider often times they forget about their end goal which is the quality work. Along with cheap price companies often demand their project in a minimum time period. As a result companies face hard time juggling between time and resource, reason being in order to finish the project they need more programmers but they don’t have the budget for it because they also have to keep price in check. More workers mean more costing which will ultimately increase the price of the service.
You can opt for the lowest price when you are buying a commodity but taking web development service or any other service is quite different from that.
What can you do is –
- Do some calculations to find out the value you are getting against your investment
- Be sure that you are willing to trust them with your project and money
- Set up meeting in order to understand their point of views
5. Time Difference Can Hamper Project
This is a generalized idea about offshoring and it is very untrue.
The time difference could be good in web development, software development; the tech industry in general. For instance – you are an e-commerce business and for maintenance purpose, you need some time off when you can’t afford too much traffic. In such a condition, you can manage work with an offshore team, because in off pick hour your office employee won’t be available. But it is morning in other parts of the world and the offshore team is ready to provide service.
On the other hand, time difference can be bad for offshore arrangement in accounting firms. The reason is these industries work in real time. There could be a time when you or your customers need to get in touch with your employee and you assigned that part of the work to an offshore team. They could be unavailable due the time difference. That may create serious problems along with customer dissatisfaction.
The key is to understand which tasks can be offshored and which ones cannot. Taking this into consideration, you can decide if offshoring is a good idea for your company.
6. Offshoring Stands for Cultural and Language Barrier
The Cultural gap is not a big deal if you think it through, cause these days everyone knows what is the norm in other parts of the world. What is their liking and what they don’t like. Then again it doesn’t matter in most of the industries. In web development it just an excuse, not even a good one.
But if you think it can somehow affect your deal, it is always better to train your offshore team a little bit and give them an idea of what you are looking for in return. Cultural gap can even be profitable if you know how to use it properly – during “Christmas” everyone takes their vacation in some parts of the world. But if you are an e-commerce business or any kind of business who need tech support, how will you manage a business in that time period. Offshoring can save you at that time because some part of the world people don’t take their holidays in December. You can enjoy your holidays with your family without any stress.
7. Offshoring is Only for Big Companies !!
I am not denying the fact that big companies do offshoring in a larger scale. But did you ever ask yourself how they became big companies? They are in today’s state because of offshoring. Take for example, ‘dell’ they have always been taking offshoring seriously. ‘Linux’ they have an open source platform and most of their programmers are from outside.
In broader perspective offshoring definitely makes sense because, you won’t be able to compete with your market leader as a new business or startup if you don’t cut your cost, while they are cutting their cost for a while.
Some major saving points-
- Office space
- HR management
- Employee health benefit and other benefits.
8. Offshoring Drags Time and Causes Overpays
It is a widespread misconception and it becomes even scarier if you combine that with “offshore teams are hard to control”. But we have to take a closer look at the situation to get the full perspective.
In an ideal web project, I believe that 15-20% of the time should be spent on client communication and project management, while the remaining 80-85% should be spent on strategy, design, copywriting, coding, search engine optimization (SEO), and quality assurance (QA).
The misconception is that offshore companies drag their project to increase the profit. But this is not the case in most of the time, especially in web development industry. In offshore web development industry, every company is trying to earn reputation and enrich their business. For that, a bad project or a negative review can hurt a lot, because of that companies always provide the best service possible. On top of that web development companies are always maintaining multiple clients at once. As a result, as soon as they are done with one project they can move to the next one. Nonetheless making a website or a web application is not “period” of a project. This type of project requires maintenance or bug fixing, a dedicated In-house IT specialized team just for that can be quite expensive for small companies and startups.
So, I would suggest before diving into the trend of offshoring dip your toe a little bit. Offshore that part of your organization that can be handled remotely with partialmonitorization and with the help of your trusted offshore outsourcing company.
Do you think these points were helpful for you? Do you know any other misconception that is not here?