What is offshore outsourcing? It’s a business strategy that will elevate your company. Because of its potential, you need to start an offshore outsourcing strategy immediately.
You’ll instantly gain cost savings, access to a global talent pool, and scalability.
In this guide, you’ll learn how to start offshore outsourcing, maximize the benefits, and use the best practices to grow your business.
Let’s get started!
What is Offshore Outsourcing?
Offshore outsourcing is a business strategy that involves hiring workers living in another country.
Hence, the term “offshore.”
Read our article for a guide on the differences between offshore and onshore outsourcing.
Offshore outsourcing usually involves hiring a workforce in a country with lower labor costs, helping you save on expenses while getting outstanding talent.
The advancement of technology has made offshore outsourcing a viable option for businesses. Tech has made our lives easier, from video conferencing software to project management and content management tools.
Now you know what offshore outsourcing is. The next section will talk about how you can leverage technology to maximize your offshore outsourcing strategy.
What is Offshore Outsourcing: Impact of Technology
Technology has made it easier to hire remote workers.
Gone are the days when businesses had to rely on hiring in-house, which can cost a fortune. Video conferencing apps and messaging tools have made communication a lot easier.
Content management and project management software have made it easier for companies to organize and delegate tasks to their team.
Working remotely has never been this easy.
Do you see where I’m getting at?
What I’m trying to say is this: don’t settle for hiring expensive local talent when you can hire great developers offshore (at a fair price, I should add).
Leverage technology. Elevate your business.
Let’s look at how offshore outsourcing can benefit your business.
What is Offshore Outsourcing: How Offshoring Benefits You
There’s a plethora of benefits when you hire offshore talent.
These are some of them:
You Save Costs
I can’t stress this enough.
Offshore outsourcing talent leads you to save significantly. According to U.S. News, the median salary of a software developer was about $127,260 in 2022.
Based on Glassdoor, Indeed, and PayScale information, you can hire a Filipino developer for a fraction of that cost.
Imagine the savings you achieve by offshore outsourcing.
Hire Great International Talent
Let’s face it – globalization is here to stay. This is a good thing.
Why?
Your company is likely on a mission to release its products to a global audience. I doubt your company labors night and day to only reach your city or state. You’re thinking long-term, and your vision is larger than your local area.
You need people from another part of the world to help you achieve those goals.
By offshore outsourcing developers from the Philippines, you arm yourself with talent and creative minds who can speak for an international market, thus providing more insights into developing products.
Freedom to Scale Your Business
Offshore outsourcing allows you to scale your operations up or down according to the project requirements. This flexibility is vital to keeping up with demands or the lack thereof.
Offshore developers are affordable, so you can hire a big team, resulting in a more efficient production flow.
Additionally, companies can ramp up their production during a peak season and scale down when demand decreases.
Grow Your Business
When you outsource offshore, you position your company for more growth. You can leverage great talent while saving on expenses, allowing you to expand your business.
Whether creating a new product, opening a new location, or adding a new feature, offshore outsourcing gives you limitless opportunities to outperform your competitors.
Gain 24/7 Development Cycle
Have you ever wondered what production would be like if your workers didn’t need sleep? (But don’t do that!) Offshore outsourcing enables round-the-clock development by leveraging time zone differences.
While one team is finishing work for the day, another team in a different time zone can pick up where they left off, ensuring continuous progress on the project.
Focus on Core Work
Outsourcing non-core tasks allows companies to concentrate on their core work.
Companies can free up internal resources for innovation by delegating routine or time-consuming tasks to offshore teams.
It’s obvious that outsourcing has numerous benefits, but is it still relevant this year?
Let’s find out in the next section.
What is Offshore Outsourcing: Why Offshoring Matters
Offshore outsourcing is gaining more popularity. In other words, it’s getting “trendy.”
And for good reason.
Here are reasons why offshore outsourcing will remain relevant in the future.
Technological Advancement
The future is here.
Technological advancements, such as cloud computing, artificial intelligence, and collaboration tools, have made offshore outsourcing more efficient and accessible.
Project management software tools are becoming increasingly sophisticated, enabling companies to manage projects easily.
Looking for the best content management software? You’re only a Google search away from finding them.
Not to mention the growth of AI in the last few years, which has helped companies, big and small, streamline their business. Leverage these technologies to facilitate remote collaboration, communication, and project management with your offshore teams.
Remote Work Culture
We live in a post-2020 pandemic world. The world has changed drastically since then, and businesses need to adapt.
One thing is certain: remote work has increased significantly in the last few years and will continue to rise.
The remote revolution has also affected other fields, such as healthcare and accounting, where companies have shifted to remote or hybrid setups.
Hiring remote workers will soon become a standard in the industry due to a boost in productivity and work satisfaction.
If you want your business to stay relevant, continue reading the next section.
What is Offshore Outsourcing: Keys for Successful Offshoring
There are a few considerations to make before diving into offshore outsourcing.
Consider Costs
You’ll save expenses when you outsource offshore, but considering how much it would cost you is crucial.
Evaluate the total costs of offshore outsourcing, including infrastructure, labor, overheads, and any additional expenses. Compare costs with the potential savings and benefits to determine the overall cost-effectiveness of outsourcing.
Consider Quality
You’ll want to assess the quality of the workers you hire.
If you’re working with an offshore outsourcing company, consider its quality. Look for certifications, reviews, customer testimonials, and anything else to help you make an informed decision.
Ask yourself: how long have they been in the business? Will this company meet my company’s needs? Are they trusted in the industry?
Pondering on these questions will help you decide.
Don’t know where to look? A company’s website is an excellent place to start your research.
Consider Cultural Fit
Find an outsourcing company that fits your cultural background.
Realize that finding a cultural fit doesn’t mean your offshore company needs to have the same culture as yours. You can work with companies with entirely different cultures but share similar cultural ties.
For example, some aspects of Western culture are highly accepted and practiced in the Philippines, and many Filipinos have ties to the Americas and Europe.
English is also widely spoken in the country, with many individuals having a “neutral accent.”
Bottomline: if culture fits, everyone benefits.
Consider Legal Compliance
You’ll want to ensure you comply with the country’s legal requirements. Familiarize yourself with the country’s labor codes and the process of setting up your business.
Another advantage of working with an offshore outsourcing company is streamlining this process. Work with a reputable offshore company to save yourself the headache of legal compliance!
The next section will discuss finding the perfect offshore outsourcing partner to fit your needs.
Finding the Right Offshore Outsourcing Partner
Now comes the good part.
As mentioned, finding a trusted offshore partner will help you jumpstart your offshore outsourcing strategy.
In today’s globalized landscape, offshore outsourcing has become imperative for companies seeking to leverage global talent, reduce costs, and drive growth. Choosing the right offshore partner is crucial for ensuring the success of your outsourcing initiatives.
Here are vital considerations to help you find the perfect match for your business:
Clearly Define Your Requirements
Defining your project requirements, goals, and expectations is essential to finding a suitable offshore outsourcing partner. Determine the scope of work, desired outcomes, budget, and potential timelines to provide potential partners with a clear understanding of what you need.
Once you do this, you can easily ‘weed out’ providers that don’t make a good fit.
Evaluate Expertise and Experience
Like I said earlier, consider their expertise, experience, and track record in your industry or domain.
Look for partners with a proven track record of delivering, relevant experience in similar fields, and a deep understanding of your business requirements. Check for any awards or certifications.
Do a background check on their website, social media, YouTube accounts, and any other platforms they use to get a better understanding of their business.
Go through sites like Google and Glassdoor to find reviews from customers and employees.
Assess Communication and Collaboration Capabilities
Effective communication and collaboration are critical for successful offshore outsourcing partnerships.
Evaluate potential partners’ communication capabilities, language proficiency, time zone compatibility, and responsiveness to ensure seamless collaboration throughout the project lifecycle.
A good offshore company always wants to stay open with you and foster a long-term relationship.
Evaluate Security Measures
Security is paramount when outsourcing sensitive work to offshore partners.
Evaluate potential partners’ security measures, data protection protocols, and cybersecurity practices to safeguard your confidential information and mitigate the risk of data breaches or security incidents.
Do they have credible cybersecurity? Are they SOC-2 compliant? These are questions you should ask.
Consider Scalability and Flexibility
Choose an offshore outsourcing partner that can scale with your business and adapt to changing needs and requirements.
Consider partners with flexible engagement models, scalable resources, and the ability to accommodate evolving project demands as your business grows.
Fosters a Long-Term Partnership
Look for an offshore outsourcing company that values its relationship with you.
Your offshore partner should make it all about you and your needs. Steer clear of companies who are only interested in grabbing your money.
Ask them the hard questions, and do your due diligence in researching companies.
Now that’s out of the way, let’s discover how to maximize the benefits of offshore outsourcing.
Maximizing the Benefits of Offshore Outsourcing
Once you start offshore outsourcing, applying the best practices to maximize the benefits is crucial.
Here are methods you can implement to make the most of outsourcing talent offshore:
Focus on Quality Assurance
Implement quality assurance processes to maintain standards and ensure the delivery of high-quality outcomes.
Define quality metrics, testing protocols, and performance benchmarks to monitor progress, identify issues, and address them promptly.
Conduct regular reviews, audits, and evaluations to assess performance and identify opportunities for improvement.
An offshore company will usually handle the QA side of things for you.
Implement Agile Methodologies
Embrace Agile methodologies such as iterative development and incremental delivery to break complex projects into manageable tasks and deliver value in small, iterative cycles.
This approach allows offshore teams to prioritize tasks, adapt to changing requirements, and deliver tangible results quickly.
This also allows for continuous feedback and course correction throughout the project lifecycle.
Leverage Cross-Functional Teams
You can build cross-functional teams composed of onshore and offshore members to foster collaboration, knowledge sharing, and collective ownership of project goals.
Continue to leverage Agile methodologies such as daily stand-up meetings, sprint sessions, and retrospectives to promote communication and alignment among team members, regardless of geographical location.
Flexible Planning and Adaptation
Embrace Scrum or Kanban to facilitate flexible planning, adaptation, and responsiveness to changing priorities and market dynamics.
Use techniques such as user stories, backlog grooming, and sprint reviews to prioritize tasks, allocate resources, and adjust project scope based on evolving business needs and stakeholder feedback.
Implement Continuous Integration and Delivery
Implement continuous integration and delivery (CI/CD) practices to automate integrating code changes, running tests, and deploying software updates seamlessly.
Streamlining the development, testing, and deployment pipeline allows offshore teams to accelerate time-to-market, reduce manual errors, and deliver quality software releases more frequently.
Transparent Communication and Collaboration
Clear and open communication is key to successful offshore outsourcing.
Establish transparent communication channels and collaboration tools to facilitate real-time feedback on project progress. Leverage project management tools such as Jira, Trello, or Asana to track tasks, share updates and collaborate on team deliverables.
To foster a culture of collaboration and accountability within the team, encourage open communication, active participation, and knowledge sharing.
Empower Decision-Making
Empower offshore teams to make autonomous decisions, solve problems, and take ownership of their work within defined guidelines and constraints.
Encourage creativity, experimentation, and innovation by providing teams with the autonomy and authority to explore new ideas, implement solutions, and drive continuous improvement iteratively.
Micro-managing your team will bring more harm than good.
Build a Strong Relationship with Your Offshore Team
Fostering a strong relationship with your offshore team is crucial for the success of your outsourcing strategy. A solid rapport enhances collaboration and productivity and ensures your offshore team feels valued and aligned with your company’s goals.
Building a strong relationship with your offshore team through regular interactions or cultural awareness activities is essential to your company’s success.
Now, we head to the challenges because company growth always comes with challenges.
We show you how to overcome them in the next section!
Navigating the Challenges in Offshore Outsourcing
Offshore outsourcing offers numerous benefits, but addressing potential challenges is essential to ensure success.
Here’s what you need to know about the common challenges and how to navigate them effectively:
Communication Barriers
Challenge: Differences in language, time zones, and communication styles can lead to misunderstandings and delays.
Solution:
Establish Clear Communication Protocols: Define preferred communication channels (e.g., email, instant messaging, video calls) and set expectations for response times.
Leverage Project Management Tools: Use project management and collaboration tools like Slack, Microsoft Teams, and Asana to facilitate real-time communication and document sharing.
Schedule Regular Meetings: Plan regular check-ins and status update meetings that accommodate all time zones to ensure project alignment and address issues promptly.
Cultural Differences
Challenge: Variations in work culture, business practices, and social norms can affect collaboration and team dynamics.
Solution:
Cultural Sensitivity Training: Provide training for both onshore and offshore teams to increase awareness and understanding of cultural differences.
Promote Inclusivity: Encourage team members to share their perspectives and practices, fostering a culture of respect and inclusivity.
Build Relationships: Invest time in building solid relationships through team-building activities and informal interactions to enhance trust and collaboration.
Quality Control
Challenge: Ensuring consistent quality of work across different locations can be challenging.
Solution:
Define Quality Standards: Establish clear quality benchmarks and expectations from the outset.
Regular Reviews and Feedback: Implement regular review processes and provide constructive feedback to maintain high standards.
Use Quality Assurance Tools: Utilize automated testing and quality assurance tools to monitor and maintain quality consistently.
Security and Data Privacy
Challenge: Protecting sensitive information and ensuring data privacy across borders can be complex.
Solution:
Implement Strong Security Protocols: Use encryption, secure access controls, and regular security audits to protect data.
Compliance with Regulations: Ensure the offshore partner complies with relevant data protection regulations, such as GDPR or HIPAA, if they apply to your business.
Confidentiality Agreements: Have clear contractual agreements to safeguard intellectual property and sensitive information.
Managing Expectations
Challenge: Misaligned expectations can lead to dissatisfaction and project delays.
Solution:
Clear Scope and Deliverables: The initial agreement should clearly define the project scope, deliverables, timelines, and responsibilities.
Regular Progress Updates: Maintain transparency through regular progress reports and updates to manage expectations and keep all stakeholders informed.
Flexibility and Adaptation: Be prepared to adapt and adjust plans based on evolving project requirements and feedback.
Legal and Regulatory Compliance
Challenge: Navigating different legal and regulatory environments can be complicated.
Solution:
Legal Counsel: Consult with legal experts to understand and comply with local laws and regulations in your country and the offshore location.
Clear Contracts: Draft comprehensive contracts that outline terms, conditions, and compliance requirements.
Regular Audits: Conduct regular audits to ensure ongoing compliance with all legal and regulatory standards.
Following these steps will ensure you overcome these challenges and take your team to the top.
In the next section, read about how we helped one company succeed using our outsourcing solutions.
Real-Life Examples of Successful Companies
Heggerty
Heggerty, a company committed to enhancing literacy through educational resources for teachers, encountered a significant challenge in improving its customer relationship management system.
As the company grew, the demand for specialized Salesforce developers became crucial. Still, the high cost of hiring such talent in the U.S. market proved a significant obstacle.
How We Helped Them Succeed
Heggerty teamed up with CoDev to solve their staffing issue.
Through a thorough selection process, we presented Heggerty with various qualified candidates, ensuring both technical expertise and a good cultural fit for Heggerty’s team-oriented environment.
Heggerty hired a skilled Salesforce developer at approximately 50% of the cost compared to U.S. market rates, allowing them to reallocate their funds toward educational resource development.
FMG Suite
FMG Suite, a marketing technology leader for financial advisors, excels in customer satisfaction. To maintain and improve service quality while controlling costs, FMG Suite needed to expand its Customer Service Team affordably, emphasizing long-term retention.
How We Helped Them Succeed
FMG Suite turned to CoDev to solve this staffing challenge. CoDev’s expertise in offshore team placement offered an ideal solution. CoDev placed a team of 14 individuals tailored to FMG Suite’s specific needs.
This team was composed of skilled professionals matched for their alignment with FMG Suite’s mission and values, ensuring a smooth integration into the company’s culture.
Learn more about their success by reading our article.
Maximize Your Business with CoDev
Offshore outsourcing is a crucial strategy that businesses should leverage to maximize their business. Strategically planning your offshore strategy will reap tremendous benefits, such as cost savings and access to a global talent pool.
CoDev’s mission is to provide great developers at a fraction of the cost, changing lives and businesses in the process.
You get talent at an affordable rate, and the talent gets a great opportunity. It’s a win-win!
Ready to level up your game?
Book a call with our Rep to learn more about how you can leverage offshore outsourcing to your advantage!
