Offshoring or Outsourcing: What Makes More Sense for You?
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In an effort to cut costs, many organizations find that they need to look externally for various services that can be done more efficiently or economically than they could do in-house. As a prudent business owner, you may be wondering whether offshoring or outsourcing such work makes sense for you.
The Difference Between Outsourcing and Offshoring
People often bandy about such terms as “outsourcing” and “offshoring” without knowing that they are two distinct business concepts.
Outsourcing refers to a company contracting with another company to perform certain services. Offshoring, on the other hand, refers to one company setting up operations in a new facility in an offshore location to take advantage of favorable economic conditions, such as lower wages or fewer government or industry regulations.
For example, a company might need new software for its operations center and hires a programming firm in another country to handle the development and implementation. If this company actually needed to set up a data center in another country, however, this would be offshoring, as the facilities would be located on another country’s distant shores.
Advantages and Disadvantages
One of the main advantages of outsourcing work is that your company can gain a competitive advantage by spending less than it would cost to do the work in-house. Your team will also be free to focus on your core business tasks.
A disadvantage to outsourcing work is the possible language barrier. You can rest assured that the professionals at OpenXcell are fluent in English and will easily communicate with you via voice, text, email or videochat according to your preferences.
Benefits of offshoring include lower fixed operating fees because of the lower cost of living and doing business in the other country, along with potentially less regulatory interference. Disadvantages of offshoring include having to contend with possible political or economic instability and the requirement to move members of your team to a distant location so they can supervise local workers.
When Does it Make Sense to Outsource Work?
Typically, it will make sense to outsource work when you are trying to control rising development costs. If your organization lacks sufficient employees with the skills needed to carry out a project, it’s a good idea to outsource the work instead of training or hiring new people.
Why You Should Consider Outsourcing
Outsourcing gives you a strategic advantage over your rivals, letting you allocate your resources far more effectively.
Lower programming salaries in India make it an easy decision to outsource work to talented developers there instead of paying exorbitant rates domestically.
OpenXcell is a premiere India-based software development company that organizations from around the world have come to rely upon for all their outsourcing needs. We are proud to have developed our Valueshore (Valuable Outsourcing) model to deliver enhanced value to our customers seeking the most favorable return on their investment. For details on the many benefits of outsourcing work to OpenXcell, please contact our team of experts today.
