To outsource or not to outsource? And to whom?
Why outsource offshore?
There are some alluring reasons to take your business to an offshore company. Here are three of the most important ones.
A fundamental reason to embark on offshoring; and if this was the only reason it would be a good one; is to save money through the luxury of currency differentials to provide a nice comfy financial cushion for a company, that could use a nest egg to invest back into their home countries.
A second, and very powerful reason is to take full advantage of the incredible knowledge base that exists in external countries that may be more desirable than the home teams. Software development, engineering and call centering are strong players in this category.
Thirdly, handing over banal yet integral work to an offshore team allows resources to be freed up and refocusing to take place on core business operations. This eradicates unnecessary difficulties of in-house management on complicated projects, while still reaping the benefits.
Outsource engineering: Which country to choose?
There are many aspects to consider when selecting your preference to outsource your business, but some of the most crucial are the advanced expertise, costs and politics of these countries.
1. Advanced expertise: The Indian skill set excels in areas of application developments, maintenance, call centers and financial processing, while up and coming in the arena of more critical analytical jobs. The Philippines shows dominant excellence in the areas of accounting, finance, call centers, animation and human resources. Russia’s proficiency in complex software development, web design and aerospace engineering eclipses the rest while China transcends with transaction processing, low-end software development and maintenance.
2. Costs: The labor costs in India range from $10 to $15 per hour for technical employees. Indian labor costs have increased over the years but have hit a steady medium while Russia has an average technical salary of $15 to $25 per hour. China and the Philippines hit the lowest salaries with a range of $8 to $10 per hour on average for a developer.
3. Politics: It is well known that outsourcing is heavily instilled in India with their government strongly approving of foreign technology ownership, so much so that they do not burden foreign companies with export taxes. This is a great advantage, however the risks pertaining to the territories of nearby Afghanistan and Pakistan are still very much on the surface and harvest anxiety on business owners, exposing them to unwanted risks. In the Philippines export taxes are also over looked but only on the condition that the foreign company makes use of their IT parks in aid of developing their business process services. In Russia you will pay your taxes until a treaty with the United States has been agreed upon, but you get your moneys worth through the well-known diligence and work ethic of the Russians. With China being the most cost effective country to make use of, they struggle on the government side where trade policies and intellectual property issues keep them restricted.
Conclusion
Whether you are a startup company or an experienced successful organization, offshore outsourcing will give you the best of both worlds. Not only will you be able to cut your costs drastically, increase your investment with the same service quality and partner your company with much sought after talent, but your organisation will gain a competitive edge by focusing more energy on your clients; the real core of your business.
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