Advantages and Considerations of Offshore IT Outsourcing

Offshore IT outsourcing has become extremely attractive as technology advances and the competition becomes tougher.  Hiring an organization outside your company to handle your IT services is now more feasible and more cost effective.  Outsourcing helps you to grow your business, no matter what the size, and if you are a small or start up business, outsourcing to another country, such as the Philippines helps to maximize the income you may have.

Why are people turning to offshore IT outsourcing and what advantages does it bring for them?  For many businesses, finding competent and affordable people is the first reason they consider outsourcing the IT jobs.  With many countries, the education rates might be a concern, but countries like the Philippines value education very highly, and the literacy rate is also reflective of that.  So you can gain a very skilled and educated workforce for a fraction of the cost you might have to pay in your home country.  Information technology is also a very sought-after field, and you are finding a market that offers you low-cost investment, dedicated workers, and the way you position your outsourcing can give you worldwide, twenty-four-hour support.

So offshore IT outsourcing provides the greatest in efficiency and bottom line profits.

  • 24/7 Worldwide coverage
  • Educated Workforce with dedicated support (although education levels will vary considerably)
  • Low Cost
  • High level customer service (QA is still needed)
  • Strategic development

Offshore IT outsourcing also provides companies a way to achieve business goals, gain an edge in their market, increase their return of investment, and decrease their overall operational expenses.  Many companies today are outsourcing a large amount of their business services; this is just taking that one step further and reaching out to grasp the best versatility while offering focus on core business needs.

Of course, it seems that offshore IT outsourcing has been most effective in utilizing the talents in India, the Philippines and other areas of Asia.  The reasons they are highly noted are, great talent, low cost, and flexibility.  Most companies will see short-term gains as well as long-term effects.

Some of the greatest short-term gains that are seen are:

  • Immediate reduction in overhead due to headcounts and attrition rates are lower.
  • Immediate ability to gain specialized services with recognized talent.
  • Focus of core business goals and utilizing resources in a more effective manner.
  • Ability to define delivery requirements and demand results without effects of losing skilled staff.
  • Utilizing the latest in IT technology at the most affordable rates.

Long-term gains:

  • Savings on expense of labor and benefits that are understood upfront based on length of contract.
  • Ability to retain more talented individuals and build your staff on a worldwide basis.
  • Creative source of reviewing problems with teams looking from outside in.
  • Profits increase from global presence and allow you the ability to gain market share in areas you might not have shown that presence previously.

Offshore IT outsourcing is an emerging market that certainly will grow and improve with time.  Just as you might be unsure of someone you hire into your organization now that same risk also occurs with offshore IT outsourcing.

Some other risks that you have to consider, and may or may not be a great offset to your cost savings, are very real issues.

Security is number one concern that needs to be weighed in outsourcing IT offshore.  You have a high risk of security breach, and must ensure that the intellectual property information is protected and that all your documents are not only secure from competitors, but also safe within your chosen IT service.    Another consideration that needs to be given before jumping into outsourcing is culture differences.  Since your outsourcing is being done offshore, you have to review carefully all the impacts of culture that will affect your business and just be sure you comprehend and work this into your plans.  You need to be sure all government concerns are addressed, especially since the US Patriot Act has been established.  While none of these are showstoppers for your outsourcing, they are areas that need to be well understood and considered.

How should you find the best offshore IT outsourcing company for you?  First, start by asking the right questions.  Understanding the company’s experience is your starting point.  You need to know how long they have been in business, ask for their references and see if they have had any contracts cancelled and why.  Second, you need to know what their pricing is.  Get a pricing structure; see what you are paying for, what kind of discounts they offer and how they handle long-term commitments.  Third and most important, you need to know what level of technology the company possesses.  Since you are contracting the firm to handle your IT, it is imperative that they are leading edge with both software, hardware and able to provide state of the art service.

The key to finding the right offshore IT outsourcing company is to do your ground work. So research the great talent that it has to offer, find a fit for your business and expand your horizons, go global and wrap your hands around the world.

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