Operational costs are skyrocketing, posing significant challenges for businesses across industries. But what if I told you there’s a way you can slash expenses while still hiring top-tier talent? Enter offshore outsourcing—a great strategy among companies wanting to save on expenses.
By utilizing offshore outsourcing, you can save costs while maintaining high-quality operations.
The good news is that CoDev helps you create a top-notch offshore team of developers to save money and grow your business.
Read more to find out how you can save and scale your company.
What Does Offshore Outsourcing Mean?
Offshore outsourcing is when you hire a company in another country to do business tasks or services at a lower cost. One of the most popular countries for offshore outsourcing is the Philippines, where CoDev has multiple offshore offices.
Offshore outsourcing is a unique strategy that allows companies to tap into global talent pools, access specialized skills, and benefit from cost cuts.
Many top international companies outsource their operations abroad for this reason.
Offshore outsourcing is more than just saving money. It also allows you to gain strategic advantages and focus on core strengths. This strategy will enable companies to grow, adapt quickly, and concentrate on what they do best.
You can position your company growth by delegating development functions to your offshore team. In the process, you lower costs, hire great talent, and scale your business for growth.
In our book, that’s a win-win-win! (For you, for us, and the developers)
In the next section, let’s look at cost-reduction strategies that companies implement through offshore outsourcing.
Five Offshore Outsourcing Advantages
What are the advantages of offshore outsourcing?
Companies often outsource offshore because it saves them money on labor costs, allowing them to hire highly skilled employees. Accessing top talent is a crucial benefit of outsourcing offshore.
Companies that offshore their teams use various strategies to help them cut up to 75% (or even up to 90%) of their operating costs.
When outsourcing offshore, it’s essential to be creative and determine what works best for your company. No single strategy guarantees success for everyone.
So, what are some strategies that companies use in offshore outsourcing?
Implement these to kickstart your offshore outsourcing strategy:
Focus On Core Competencies
One of the main strategies companies use is to shift non-core functions or repetitive tasks to offshore locations. These tasks include human resources, data processing, supply chain management, logistics, and customer service.
In this way, companies can take advantage of the wage differentials of offshore teams and achieve additional savings while focusing on the core of their operations.
By doing this, you delegate less urgent tasks to focus on the ones that rake in more revenue and ROI, which helps scale and grow your business.
Get Competitive Pricing
Offshore outsourcing partners often operate in countries with lower overhead costs, leading to additional operational expense savings.
At CoDev, for instance, we have five main offices in the Philippines that manage various departments. Having multiple offices in many locations is possible because of the lower overhead costs to maintain operations in the country.
Since we can keep overhead costs low, we can invest more in our workers, allowing them to work more efficiently for your company.
Hire Talent At a Lower Cost
Companies save by hiring world-class developers from the Philippines at a fraction of the cost. Learn how you can do that here.
Hiring local in-house developers can cost a fortune to maintain.
In the Philippines, developers are highly skilled and often more qualified than in-house developers.
With great talent on your team and a lower maintenance cost, you can focus on growing and scaling your business to reach your company’s goals.
Access to Modern Technology
Businesses nowadays are tapping into offshore outsourcing to stay ahead with the latest tech.
Outsourcing to a reliable partner can be a game-changer if you need more technology or are on a tight budget.
By teaming up with a savvy offshore provider, you can get access to top-notch digital tools and applications.
Imagine partnering with an offshore outsourcing company armed with the tools you need. They smoothen your workflows, reduce manual tasks, and speed up your operations.
That’s how offshore outsourcing can whip your operations into shape and boost your service quality even when you don’t have the right technology.
Quality Service
Choosing the right offshore outsourcing company for your business can ensure you receive top-notch service quality. Many offshore companies have dedicated quality assurance (QA) teams to monitor employee performance and help them make necessary improvements to improve.
For instance, look at customer service offshore teams in the Philippines. Their QA teams meticulously monitor agents and review their calls to ensure they’re at the top of their game when speaking with clients.
They also offer regular coaching sessions and training programs so workers can continue improving their craft.
Their goal?
To guarantee stellar service and keep everything aligned with their client’s business standards. Streamlining the quality assurance process to an offshore company can help companies save money.
Those are a few strategies that companies implement to save on their production costs.
However, if you’d like to get the most out of offshore outsourcing for your company, you’ll need to know what the best practices are before you begin.
Best Practices for Implementing Offshore Outsourcing
I hope you’re excited to build your offshore team! Before that, we must discuss the best practices for implementing an effective offshore outsourcing strategy.
While offshore outsourcing offers compelling benefits, successful implementation requires careful planning and execution. Conduct thorough research to identify suitable outsourcing partners, considering factors like expertise, reputation, and cultural fit.
Your offshore outsourcing company must establish clear communication channels to facilitate collaboration and minimize misunderstandings between you and them.
Additionally, setting realistic expectations and ensuring compliance with data security regulations are essential for a successful outsourcing partnership.
Here at CoDev, we only hire experienced developers, so you get the best talent to work for you.
Four Disadvantages of Offshore Outsourcing
While offshore outsourcing has many advantages, it also comes with its share of disadvantages.
It’s essential for you to keep these in mind as you make an informed decision.
Here are four disadvantages of offshore outsourcing:
Cultural and Language Barriers
Working with a diverse team definitely brings many cultural and language differences to the table. On the one hand, you gain valuable perspective from their experiences and unique upbringing. Conversely, you run the risk of miscommunications and lowering team chemistry.
Timezone Differences
Remote teams can face challenges due to team members living in different time zones. Syncing everyone’s meetings, standups, or training schedules can be challenging. Your team must adjust to the time differences to stay productive, which can cause a little stress when offshore outsourcing.
Quality Control Issues
Quality issues can arise without the right QA team handling your remote developers. Handling these quality control issues will be challenging without partnering with a good offshore outsourcing provider.
Security Issues
Cybersecurity has been a hot topic lately, with the increased numbers of hackers, phishing scams, and stolen data. Managing an offshore team can present security challenges regarding your data privacy, including your company’s code projects.
How do you know you can trust the freelance offshore developer you hired on LinkedIn isn’t going to steal your code? Only time will tell, but that’s a risky play.
Overcoming Challenges in Offshore Outsourcing
Don’t let these challenges intimidate you because the benefits of offshore outsourcing outweigh the challenges.
Cultural and language barriers can potentially increase miscommunications, but proactive measures such as implementing cultural training and language proficiency programs can alleviate that.
Time zone differences can also pose logistical challenges, but reworking your team’s work schedules to accommodate everyone can fix this.
One example we use at CoDev is synching our US team’s afternoons with our Philippine team’s mornings for meetings. It works for both teams. Another way is to have your teams sync with a few hours of overlapping work, which might be four hours in the afternoon for one team and four hours in the morning for the other.
Additionally, partnering with a reliable offshore outsourcing partner can help maintain quality control and avoid security issues. A trusted offshore development firm provides safety, reliability, and quality, ensuring that you work with honest offshore developers.
Now that you know how to navigate these issues, the question now is: What does the future of offshore outsourcing look like?
We will talk about that in the next section.
Future Trends in Offshore Outsourcing
Looking to the future, the outsourcing landscape is evolving in response to technological advancements and changing market dynamics.
Emerging trends such as automation, artificial intelligence, and robotic process automation (RPA) are reshaping offshore outsourcing practices, offering new opportunities for increased efficiency and cost savings.
The rise of nearshore outsourcing, which is partnering with offshore providers in neighboring or nearby countries, is also gaining popularity because of perks such as proximity, cultural affinity, and little travel time.
Be the Best, Hire the Best
Cost reduction is essential for sustaining profitability and gaining a competitive edge, and sustaining profitability is vital for software companies grappling with the high costs of local developers.
Offshore outsourcing is a great strategy to cut costs while remaining competitive in the global market. By utilizing the power of offshore outsourcing, businesses like yours can achieve savings of up to 75% across various operational functions.
As businesses continue to embrace the opportunities presented by offshore outsourcing, they position themselves for success in an increasingly interconnected world.
Do you want to find world-class developers from the Philippines with unbeatable rates?
At CoDev, we help you stay ahead by building your dedicated offshore team so you can start saving on development costs. Check out our resource center for more helpful blog articles on offshore outsourcing.
Book a free call with us here so we can help you get started.
