What are the Benefits of Offshoring? - TatvaSoft
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What are the Benefits of Offshoring? · 1. Onshore Outsourcing 2. · 1. Access to Experts · 2. Economic Efficiency · 3. Competitive Advantage · 4. Faster Turnaround ... BycontinuingtousethiswebsiteyouagreetoourCookiePolicy. IAgree WhataretheBenefitsofOffshoring? Mostofthebusinessesareseeingaconstantcrunchinmanagingtheirdailyoperations.Thisisconsistentlyburgeoningforthepastyearduetouncertainmarkettrendsandeconomicdowntime.Surely,ittookatollonmanysmallandlargebusinessesandtheirleadersarestillnotsurehowtohandlesuchsituations. Duringsuchdistressingscenarios,everybusinessownerlooksforsomekindofserviceproviderwhocouldefficientlymanagetheirbusinessprocessesandbringaboosttotheirregularactivities.Insuchscenarios“Outsourcing”comesasarescueformostbusinesses.Oftenmismatchedwithoffshoring,boththesetermsbringambiguityintothemindsofotherleadersastowhichoneshouldtheyuse.Theglobalbusinessmarkethasdefinitelyheardaboutboththesetermsbutisn’tsureofwhentousethem,howitworks,thesignificanceandadvantagesofoffshoresoftwareoutsourcing. TableofContent TypesofOutsourcing WhataretheAdvantagesofOffshoreOutsourcing? WhataretheDisadvantagesofOffshoreoutsourcing? TipstoEffectiveOffshoreOutsourcing Conclusion So,toburstthisbubbleoflackofunderstandingofOutsourcingandwhatdoesoffshoringmeansingeneralterms.Inthisblogpost,wewillbediscussingin-depthOffshoring,Outsourcing,theirdefinition,advantages,anddisadvantagesofoffshoring.Inaddition,wewillalsobesharingsomeprotipsthatwillhelpyoutoeffortlesslyuseoffshoreoutsourcingforyourorganization. So,let’sgetstarted. 1.TypesofOutsourcing Haveyoueverwonderedwhybothoftheseterms-offshoringandoutsourcingareofteninterchangedormisunderstoodwithoneanother?Itisbecauseboththesetermsaremostlyusedtogetherandofferspecialaidstobusinesseswhenutilizedappropriately. Outsourcingisabusinessprocesswhereonecompanycollaborateswithanotherbusinesstocarryouttheircorebusinesstaskswhichtheywereunabletoaccomplishwithlocalemployees.Itisabusinesspracticewheretheclientcollaborateswithathird-partycompanyforaspecifictimeperiodtoharnesstheirexpertiseandtechnologyspecialism. Technicallyspeaking“Offshore”isalocationwherebusinessesoutsourcetheirservicestoacompanylocatedofftheshore.Thismeansitisgeographicallyrelocatedandmanagingoperationsfromoffshore-anothercountryorcontinent.Herein“Offshoring”,shoremeansalocationandoffmeansdistant.So,totaloffshoringmeansworkingwithanoffshoreteamatoverseaslocationsfromyourcompany’sgeographiclocation. Offshoringcanbeofmainlytwokinds–productionoffshoringandservicesoffshoring.Ifwehavetodefineproductionoffshoringthenwecansaythatitisa processofphysicallyrelocatingthemanufacturingoperationsfromonecountrytoanother.Whileinthesamecontextservicesoffshoringmeanstherelocationofadministrationandtechnicalservicestothird-partywith/withoutchangingthelocation. Nowwhenwecombineboththeseterms,“OffshoreOutsourcing”thenwecandefineitasabusinesspracticeofhandingoveressentialbusinessoperationstoacompanythatislocatedinadifferentcountry.Loweroperationalcost,laborcosts,easieraccesstotheglobalworkforce,ever-increasingcompetitionandgreaterqualityofservicesaresomeofthemajorreasonswhybusinesseslookforoffshoreoutsourcing. Thisisnotanewtrend.Butmostofthebusinessesalreadyfollowthispatternoftradingbusinessfunctionstodifferentcompaniesformanyyears.Moreover,manydevelopingcountrieshavestartedofferingtaxbenefitsandfinancialincentivestoattractforeigndirectinvestmentstosupportthisgrowingindustry.Companieshadanintenttoexpandtheirbusinessgrowthwiththisemerginguseofoffshoring.Theperspectiveisstillthesamebutwithanewnamecalledoutsourcing.Basically,youneedtooutsourcetheservicesinthreemainwaysonthebasisofdemography.TherearethreetypesofOutsourcingservices 1.OnshoreOutsourcing2.NearshoreOutsourcing3.OffshoreOutsourcing Todefineinbrief,OnshoreOutsourcingisatypeofoutsourcingwherebusinesseshavetheopportunitytooutsourceinthesamecountryormaybethesamestateorcity.WhileinNearshoreoutsourcing,businesseshaveaccesstotalentedresourceslocatedinneighboringoffshorecountry.IfwetakeanexamplefordevelopedcountriesliketheUSA,thenearshorelocationsareCanadaorMexicoforsoftwareoutsourcing. Thisblogismajorlyfocusedonoffshoreoutsourcingandwehavemostlycoveredwhatoffshoreoutsourcingis,whatsignificanceitbringstoanordinarybusiness.Now,intheupcomingsection,wewillbediscussingthemanybenefitsofoffshoringforyourorganization. 2.WhataretheAdvantagesofOffshoreOutsourcing? Withaspikeincloudadoption,Europeanorganizationshavespentover$20bnonIT&businessprocessoutsourcingintheyear2020.Thisislikea7%increasewhencomparedto2019–whileglobalas-a-servicedealsrosetoaround$33bnsaysaComputerWeekly–aleadingprintmagazineofhi-techtechnologies. Fromtheabovestatistics,wecanseeclearlythatalargenumberofbusinessesaregettinginclinedtooffshoreoutsourcing.So,whatismakingthesebusinessesadoptthiscutting-edgecultureofoutsourcingtoafarawaylocation?Therearenumerousbenefitsthatbusinessownerscantaponwhentheyusesoftwareoutsourcingfortheirbusiness. Soherearesomeoftheoffshoringbenefitsforyourbusinessdomainsandindustries. 1.AccesstoExperts Offshoreoutsourcingcompaniesarespecializedintechnicalaspectsofbusinessandwell-equippedwithalltypesoftechnicalresourceswithanall-rounderskillset.Offshoringspecializesinnicheskillsaspertheregionaltrendsmarketdynamicsataratelowerthanwhattheyspendinthehouseandprovidesskilledlabor.. YoucannotconstrainOutsourcingtojustonedomainorverticalorcountryorlabor(insoftwaretermstechnicalexperts).Butmostoftheservicesusedinoutsourcingarecustomsoftwaredevelopmentservices,financialservices,healthcaredatamanagementservices,marketresearch,intellectualpropertyresearch,developmentdesign,andmore. 2.EconomicEfficiency Supposeyouownaninteriorstudio,andyouwanttoexpandyourbusinessnotonlyinyourcountrybutaroundtheglobe.Toexpandyourbusiness,andtravelallovertheglobeforpotentialclientsisnotacostsavingssolution.Itwouldcostyouafortuneifyoudoso.Instead,ifyoupartnerwithmultipleclientslocatedatdifferentgeographies.Withthis,therewillbelowerlaborcostsandlessbusinessrisks,plusitisacostsavingsapproach.Moreover,thechancesarethatyoumightgetthesameresults. So,itiswiselysaidthatOutsourcingreducecostsforallbusinesseswhodecidetooutsource.Youcanseehugecostbenefitswithnocompromisewithquality.Also,italignswithwhatbusinesswantstoinvestandonthatbasiswhattheycanachieve. 3.CompetitiveAdvantage Comparedtopeerswhoareworkinginthesamesoftwaresector,thereisahugedifferenceintheappstheydevelopversuswhattheyexpect.Mostofthetime,businessesareconcernedwiththequalityoftheapp,theamounttheyinvest,andtheprofittheygainversuswhentheyoutsource.Youhavefulfilledalltheseparameterswhichwillgiveextratimetotheenterprisesforstrategicplanningfortheirbusiness. 4.FasterTurnaroundTime Anoutsourcingdevelopmentteamisdedicatedlyworking24*7foryourbusinessandsotheproductivitywillbehigher.Theturnaroundtimewillbehighercomparedtocompetitorsinthesamebusinessbecausetheyareexperiencedandhavedevelopedinnovativeapplicationsonaregularbasis. 5.RoundtheClockAvailability TimezonedifferencesisanotheressentialadvantageofOffshoring.Itoffersbusinessesthelibertytousethededicatedvastpoolofresourceswhenevertheyneedit.Infact,IndianoutsourcingcompaniesemployateamthatworksforclientsintheUSAasperthetimewhentheUScompanyfunctions.Thisshowstheavailabilityofresourcesontimeandoverothertimeslotsaswell.Nowwewilldelveintotheothersideofthecoin.WecancallitaslimitationsordrawbacksofOutsourcing. 3.WhataretheDisadvantagesofOffshoreoutsourcing? Whenbusinessesdecidetooutsourcetoanoverseaslocation,therearefewdisadvantagesofoutsourcingthatmakethemhesitanttooutsource.Thereasonscanbebasedonsomeone’sexperience,thecompany’spastexperienceorreviews,testimonials,references orqualitynotmatchingparentcompanyrequirements.Peoplemighthavefounddisadvantagesofoffshoringandsoreduceditsoperations.Though,therearesomechallengesthatmakeoffshorelesspreferred. 1.LackofTrustandControl Imagineyouhaveplacedavaluableobjectatadistantlocationsothatnoonecanhaveaccesstoit.Theplaceissafebutitisquitefarandyouareunabletoaccessit.Definitely,youwillhaveafearofloss.Similaristhecasewithbusinesseswhooutsourcetheirvaluablebusinessoperationstoanoffshorelocation.Hencetheylacktrust,control,andaccess.Oneoftheprimaryreasonsforbusinessesbeingrestrictedtooutsourcingtoafarawaylocation. 2.LanguageandCommunicationBarriers Differentcountrieshavedifferentlanguageswhicharenotstandardandisoneofthehurdlesforbusinessestocommunicate.Thereisaculturalgapbetweenyourlocalteamandyouroffshorepartnerwhichmayleadtocontradictoryopinionsandoftendisputeswhichwillbedemonstratedintheperformance. 3.IntellectualPropertyandDataSecurityRisks Yourbusinessisyourvaluableassetandyoucannotaffordtoloseanykindofdatarelatedtoyourbusiness.EnterprisesOffshoringoperationshaveafearofsecuritybreach,thattheirvitalandconfidentialdataorevenpropertyrightswillbeleakedtoathirdparty.BusinessesshoulddraftaSoftwareAgreementoranNDA.Itwillbeasmartsolutionforallwhowanttohavetherightsreservedfortheirdevelopedapplication.Soastotakebenefitsofoffshoringservices. 4.TipstoEffectiveOffshoreOutsourcing Afterknowingtheprosandconsofoffshoring,youwouldnowthinkthatyouareallsettooutsourcetoathird-partyoffshoreteamfromothercountries.Butbeforeyououtsourcetherearefewprotipsthatwehavehand-selectedwithourexperienceofdevelopingmultiplecustomizedsoftware. 1.AlignGoalswithAllStakeholders Itisveryimportanttoconveytoyouroffshoreoutsourcingcompanywhatyouwanttoaccomplishusingthissoftwaredevelopment.Ensurethatalltheprojectstakeholdersarealignedonthesamepage. 2.FrequentCommunication Communicateconstantlytogaugewhatisgoingonwithinyouroffshoreoutsourcingcompany.Selectaprimemethodtocommunicatewithbusinesses,takeregularupdates,makediscussionsandgiveinstructions. 3.DevelopTrust Oneofthestrongpillarsofoffshoringsuccessfullyisbydevelopingtrust.Makesureyoutrustyouroutsourcingpartnerandtheirtacticsofdoingbusiness.Youhaveselectedthisteamwithalotofresearchandreferences,soentrusttheirservicesandyouwillbeabletoreapbenefitsfromit. 4.UnderstandCulturalChanges Becomeadaptivetothecultureoftheclientsothatyouknowmoreabouttheclient.Inthisway,youcanbuildagreatrapportwiththecompanyforalastingbusinessengagementofyears. 5.SetRealisticGoals Notallorganizationscanworkunderpressureandsometimeschasingdeadlinesmaydeliverunfortunateoutcomes.So,setatargetandaplanwhichisrealandachievable. 6.DevelopaSoftwareAgreement Thisisthelastpointbutthemostconsiderableone.Developingasoftwareagreementwithclausesthatsuitsbothpartiesofthebusiness.Thiswillbeawrittenagreementthatwillsafeguardbothpartiesfromanyfuturedisputes. 5.Conclusion Towardstheendofthisblogpost,wehopewehavehelpedyougaininsightsonwhatoffshoreoutsourcingis,whataretheoffshoringprosandcons.Withoutabiasedviewpoint,wehavediscussedtwodifferentsidesofoffshoreoutsourcing.Thiswillhelpyourcompanytomakeajudgmentbasedontheconsiderablepointsofoutsourcing.Offshoringhasalwaysbeenaprofitableaspectforallscalesofbusinesses.Withourhighlyskilledemployeesandtheirdexterityindevelopingsoftwareapplications,wehopeyourbusinessisabletogainfruitfulandsustainableoutcomes. IteshSharma IteshSharmaiscorememberofSalesDepartmentatTatvaSoft.Hehasgotmorethan6yearsofexperienceinhandlingthetaskrelatedtoCustomerManagementandProjectManagement.Apartfromhisprofessionhealsohaskeeninterestinsharingtheinsightondifferentmethodologiesofsoftwaredevelopment. Categories All(225) .NETDevelopment(11) AngularDevelopment(9) CloudComputing(4) CustomSoftwareDevelopment(27) DedicatedDevelopmentTeam(7) EducationSoftwareDevelopment(4) EnterpriseApplicationDevelopment(11) FinTechSoftwareDevelopment(21) HealthcareSoftwareDevelopment(10) ITOutsourcing(16) JavaDevelopment(8) NodeJSDevelopment(15) OffshoreOutsourcing(4) OffshoreSoftwareDevelopment(11) OutsourcingtoIndia(1) ReactDevelopment(5) SharePointDevelopment(14) SoftwareDevelopment(7) SoftwareDevelopmentIndia(1) SoftwareOutsourcing(26) SoftwareTesting(10) VueJSDevelopment(4) Comments Leaveamessage... 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