Offshoring vs outsourcing: What delivers most value?
And which will be more beneficial for you?
And which will be more beneficial for you?
14 min read
When comparing offshoring vs outsourcing, you likely have arrived here because you wish to know what will be more beneficial to your company. Well, let us explain!
To help you understand the differences between the options and decide which one is better for you, we will break down the pros and cons of both. Read on.
Offshoring benefits are:
⦿ Cost cutting
⦿ In-house staff can focus on core business
⦿ Creation of a much more diverse culture
⦿ Entering new markets is easier
Offshoring disadvantages are:
⦿ The choice of a destination is final
⦿ HR management is on you
⦿ Huge time commitments
⦿ Increased liability
Meanwhile, outsourcing offers these advantages:
⦿ Far easier research
⦿ Getting things moving faster
⦿ No additional liability
⦿ No HR headaches
⦿ Instant access to expert talent
⦿ Smart cost optimization
However, nothing goes without drawbacks. With outsourcing, the potential ones are:
⦿ Vague control over the end product
⦿ Lack of flexibility
⦿ Communication problems
⦿ Data risks
⦿ Hidden costs
If you want to get more insight on all of this — welcome reading further!
Offshoring can be met in just about every industry today. Indeed, around 71% of financial service executives today will offshore at least some of their key services. A 2021 survey found that India was the most popular nation for offshore business services, followed by countries like China, Malaysia, Indonesia, and Brazil.
There are many benefits to offshoring. What, though, are the main ones?
Of course, not everything about offshoring is beneficial. Just some of the concerns include:
Offshoring is all about aiming for countries with lower living and business costs. In some cases, it could also come down to regulatory decisions. Your business might have new opportunities in a different part of the world, but you are still 100% liable.
There are many reasons to consider outsourcing, but for most companies, everything revolves around cost. Indeed, around 70% of companies will look to outsource at least part of their work to help reduce costs.
When comparing outsourcing and offshoring, the benefits of going for the former are clear. Basically, the benefits of outsourcing address all the difficulties of offshoring:
The first thing to mention here is that basically, successful outsourcing comes down to choosing a reliable provider — they care about their reputation and will do their absolute best to give you exactly what you want.
So, if you’ve done this — you can feel safe now for the quality of your end product. If you want to learn how to pick a trustworthy outsourcing partner — read our article on the topic.
But to give you a full view on IT outsourcing, here’s what you can encounter when partnering with a mediocre services provider.
If you want the benefits of both models combined (those are: physical presence in an offshore location with lower costs AND liability & burden lying on a provider) - then our Offshore Development Center (ODC) is what you need.
This is basically your offshore office, just virtual and within our premises. All the staff that you choose are assigned exclusively to your projects and are not involved anywhere else thus being solely your remote full-time staff. Upon your decision, the teams may reside in a detached space and even have your branding there — we are highly supportive of everything that helps our Clients feel comfortable working with us.
All you have to do to open an ODC is to tell us your requirements. Really, that’s just it. Everything else is on us. We’ll assemble an entire team of BAs, developers, PMs - everyone needed for your project, exceptional quality guaranteed. We’ll carefully treat your requirements and offer the best way to implement them based on our broad IT experience of over 10 years.
The ODC also supports all your scaling plans, simultaneously optimising their costs, by being able to give out up to 100 all needed SDLC experts per year. So you can be sure, we’ve got you covered.
If you would like to know more about this engagement model, visit our guide. Or, if you want to get a personal consultation to account for all your business’ peculiarities, fill in the form below and within just one business day, we will be in touch to start consulting on your offshoring and outsourcing ambitions!
We strive to help you reach your goal and are fueled by the strategic outcomes, not immediate revenue. And our biggest pride is our Offshore Development Center that we position as your very own remote office. We are fully concentrated on your business there, up to setting a detached space and branding it with your attributes. All of this to reassure you in your foreign team just like in your local one for lengthy and productive development.
Here is our Codex around which we organise all our work:
Our purpose - To make the world better through effective Software Development.
How - Make money for us and our Clients.
Our codex - Taking care of our experts.
Our aspiration - Deliver on time.
Outsourcing to SENLA, you can be sure that we will bend over backwards to help you reach your goal.
We always keep our processes on the surface to be easily seen by our Clients. We also strive to make them as reassured in our partnership as it’s only possible. On the majority of our projects, we use bi-weekly sprints with Friday demos to keep our Clients posted. All our staff has a minimal B2-level command of English to eliminate any challenges in outsourcing communication.
We are also so keen on delivering that we happily assign local delivery managers to help eliminate any, even slightest obstacles. For example, we did it for WePay, BOSCH, Bayer and Banx.One (for them we even provided 24/7 online support for live events). As said — we’ll do everything to keep you satisfied.
SENLA = people. And all of our 650+ experts are not random people. These are our staff, the people that chose SENLA and that were chosen by SENLA (we are not a recruitment agency, disguised as an IT outsourcing company). We carefully nurture our tech talent as laid out in our codex, providing them constant opportunities for growth. So you can be sure, whatever your needs are, we will get you covered.
In case, though, we don’t have the experts you need right away, we are ready to invest in our staff to get them the necessary skills for the sake of our partnership. We won’t mislead you saying that we have the talent but it’s currently busy and at the same time unleashing a recruitment machine, like an unpleasant majority of IT outsourcing firms do. Our moral compass prohibits such an attitude to our Clients. Again, SENLA is a quality mark.
Why are you separating outsourcing and offshoring? Isn’t the latter a form of the former?
There’s a great deal of confusion between these terms. You can even find lots of articles on the web saying that offshoring is just outsourcing to an overseas country, like from the USA to Poland. But that’s not true. Offshoring is physically moving your powers overseas while outsourcing is giving the work away to a 3-rd party, no matter where. You can even outsource from the USA to the USA, as you wish.
So, these are two totally different strategies for businesses and we created this article to help executives understand which approach better resonates with their companies.
Is your Offshore Development Center really a combination of these two strategies as you position it?
Absolutely. This is your fully owned remote office, in an offshore location (well, depending on where you reside, obviously 🙂), just without any hassle that accompanies opening it. It’s all on us. And we don’t just say that it’s your office; upon your request we may allocate a detached space for the talent we give you, brand this space to your liking and welcome you or your staff there. In fact, some of our Clients successfully do that and enjoy their remote team branded to their standards. We will do everything to comfort you for our lengthy and productive cooperation.
I liked your proposal. Do you only offer your ODC for new projects? Can I transfer ongoing development to it?
Sure, we are happy to help you realise your goals.
We will offer an introductory call with our BD team to clarify the project needs.
Upon your request, we will sign an NDA.
After the evaluation, we will offer a preliminary solution (CV, timelines, etc.).
If everything is OK, our staff will be happy to get to work.
Fill in the form below and let’s discuss our successful partnership!
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