How to Reduce IT Outsourcing Costs Without Going Offshore

When we’re talking about significantly cutting IT costs, we’re typically talking about tapping offshore markets where labor costs are significantly lower.

But going offshore always comes at a price, typically in the form of reduced efficiencies caused by communication breakdowns, cultural misunderstandings, time differences, and combinations of those problems and many others. Still, the cost-savings are a powerful draw. You can have better interaction and quality with full onshore team, but that comes with a high cost. What if we could have something in the middle?

There is another approach, which I call global shoring, which is very less talked about, is providing the cost-saving advantages of offshoring without any of the disadvantages.

The an equation representing global offshore modeling would look something like this: Senior team onshore + mid and junior team offshore = high quality and lower cost.

Initially implemented by large IT outsourcers, the global shoring model is now being adopted by mid-sized companies and small startups. With global shoring, a project’s leads, such as project manager, technical architect, designers, and senior QA professionals, are provided onshore, while developer, testers are offshore. Onshore team interface with the customer and perform high end responsibilities, while simple, routine, and repetitive processes are performed offshore at a significant savings in labor costs.

Global shoring has some surprisingly attractive advantages beyond the labor cost-savings.

Seamless Communication and Project Management

Having project managers and technical leads onshore enable you to talk with them on your time and your terms. The communication advantages are enormous when everyone is in the same time zone and on the same page culturally and technically. Problem-solving is faster, easier, and less chaotic. Complex misunderstandings can be eliminated with face-to-face, on-site appearances. It is always easier to explain your vision and needs to a team that is in the same country as you and understands your industry, company, and product cultures the same way you do. Your on-shore management leads can insulate you from having to navigate all the time, language, cultural barriers, and other obstacles to efficiency that offshoring can pose.

Intellectual Property Rights (IPRs) are Better Protected

When you hire a global shoring company with offices in same country as yours, your contracts will be in the law of the land. That means it will be easier to find and enforce any IPR infringement or copyright issues with a global shoring company than with an offshore company. If an offshore company infringes on your IPR, your legal options will be fewer, more complex, and costlier if the case must be pursued overseas.

Greater, More Focused, Quality Control

A global shoring company will provide senior QA and tech leads onshore, and, because they are overseeing offshore processes, a more deliberate and disciplined quality assurance approach must be taken. Time and calendar disparities will be planned for and accommodated in project timelines, ensuring that requirements and testing standards are met.

Better Customer Support (One, Much Closer, Throat to Choke)

If something goes awry in IT services provided by a global shoring company, you will know you can always reach out to them in the same time zone and they’ll be able to respond to you much more easily than an offshore company on a different continent and in a different time zone. Plus, proximity carries a greater weight of responsibility. It’s always easier to ignore someone a world away, than it is to ignore someone who could be knocking on your door later in the day.

Cost is Cheaper than Onshore

A global shoring company will charge you rates somewhere in the middle of a full onshore company and an offshore company. That is still a great cost advantage. Typically, a global shoring company will do 30- to 40-percent of a project’s work onshore and 60- to 70-percent of the work offshore. The final savings are difficult to turn down, especially when they come without the disadvantages of full offshoring.

Global Shoring Creates Jobs Onshore

The best part of hiring an onshore company is knowing that you’re getting the advantages of offshoring, but you’re also helping to create jobs in your own country. In today’s business and political climate, that’s an attractive message to be able to communicate. global shoring provides you economic benefits while helping to support your own country’s economy.

Source: Inc.com-How to Reduce IT Outsourcing Costs Without Going Offshore

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

w

Connecting to %s