There are many reasons why companies should outsource. Lower costs are often cited as the most significant motivating factor, although that's not the whole story. The lack of locally qualified staff, access to a global talent pool, the ability to scale quickly, shorter delivery times, and the fact that there is no need to spend time and money on recruiting are all factors that keep companies from small to large lure you into the world of outsourcing.
The world of technology-driven companies is so fast and dynamic that sometimes you cannot achieve practical and scalable growth in-house with your team. Outsourcing is a broad term that means transferring certain business functions or projects to a third party company based around the world - two streets away from your company or on another continent.
It looks a bit different if you choose the offshore variant. The cost of living in countries like India and Ukraine is significantly lower than in the United States and Western Europe. This fact also correlates with the salary of people living in these countries. Therefore, it is considerably cheaper to hire equivalent workers through offshoring than to do so in your own country.
Note that this is not an inferior educated programmer with no satisfactory experience but an equal workforce. Many cities offer emerging and talented IT communities. The profession of software developer is a popular choice among young people and no less desirable than a doctor, lawyer, or engineer. So if you work with the right offshore partner, you can always find the developers who meet or exceed your expectations - and at a much lower cost.
All the costs associated with the staff, such as health insurance, recruitment and office space, are then no longer worth mentioning. Either they are significantly reduced, or they don't exist.
So where's the catch? Then why not every company relocates its software development to India and benefits from the advantages. It's up to perception.
As already mentioned, recruiting at home is advantageous because you can rely on the talent of the people. If you have never built an offshore team before, it is not far from assuming that the subsequent costs of inferior work or poor reliability may outweigh your financial savings.
Advantages of offshore development
● Time zone advantages, which enables support around the clock. Due to the time difference between the internal and external teams, an uninterrupted workflow is achieved.
● Access to a global talent pool makes it much easier to find professionals with the skills you need than trying to find them at home.
● Lower costs due to lower production costs, salaries, staff living costs, etc.
● Lower costs than nearshoring
● More providers on the market
The disadvantages of offshore development
● The time difference is a double-edged sword. Communication can be challenging if you usually sleep while the offshore team is working.
● Different working habits, which result from different cultural norms and attitudes towards work, can stand in the way of your established business processes and require adjustments on both sides.
● Language barriers can cause misunderstandings and unnecessary effort unless you and the company you work with have at least one common language.
● Long distances between you and the offshore seller can make business travel a costly and troublesome affair, especially if you need to visit your partner's offices regularly.
How can you ensure that offshore teams work well in everyday life?
If you share only one office as a small business, you might be able to get away without using modern planning tools like Slack, Asana, or Skype. Even though it is not highly recommended, it can still work for small teams. However, if you decide to hire a team of developers, there will be no more space for the "will be running setting" at the latest. Then you are dependent on a structure that is recognizable by everyone to guarantee a smooth process.
Instant messaging, video calls, task planning: many simple processes are easy to implement and already massively optimize every area. You will hire a team of developers and make sure you only get the best. Use the right tools and make sure everyone on the team understands how to use them, and everything will work fine.
It is also helpful to incorporate an "If you are not sure, don't hesitate to ask!" Culture. It can help overcome initial hurdles.
And that's all there is to it. If your business is stable, your team is happy, and you don't plan to proliferate shortly, there is no need for you to invest in an offshore team. However, if growth is an essential factor for you (or you cannot cover the required capacity at home), then expanding your team in India is a worthwhile and lucrative option.