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IT offshore resources are not only a good solution to counter the talent shortage in the global IT sector. They also deliver cost savings as well as access to new technical and personnel opportunities.
Yet in spite of their benefits, Deloitte reports that only 76% of executives avail their services.
One of the top reasons organizations hesitate to take this step is the misconceptions around working with offshore teams. So, to ensure that your organization does not miss out on benefits any longer, here are the truths behind seven common myths.
Myth 1) Offshoring Means the Same as Outsourcing
Unfortunately, the internet is full of pages that use the terms ‘offshoring’ and ‘outsourcing’ interchangeably. While both refer to strategies for contracting work or services to external providers, they differ in scope and location.
Outsourcing entails hiring an external company or service provider to perform specific tasks, services, or functions traditionally handled in-house. This means relying on an external entity to handle part of business processes, either domestically or internationally.
Meanwhile, offshoring is when a company contracts services or sets up operations in a different country. That way, it can create remote IT teams to supplement its staff, and gain access to excellent skill for less.
Though outsourced and offshore resources promise cost savings, the former comes with risks such as loss of ownership and lack of customer focus.
Offshoring, on the other hand, integrates staff into your organization. So, like your local workforce, they share your mission, report to your management, and are overall more dependable.
Myth 2) Offshoring is Only Feasible for Cutting Costs
Cost-savings may be the primary reason most organizations choose offshore resources. However, there is more to this process than just saving on labor. Other equally important reasons to offshore include:
- Access to a Global Talent Pool – Offshoring allows businesses to tap into a broader and often highly skilled talent pool, helping drive innovation and efficiency.
- Scalability – Companies can quickly scale their operations according to changing demand without the constraints of hiring or laying off local employees.
- Time Zone Differences – Offshoring to locations in different time zones allows businesses to operate 24/7. This can lead to faster turnaround times for projects, increased customer service availability, and improved responsiveness.
- Tax Benefits – Some countries offer tax incentives or lower tax rates for businesses that offshore certain operations.
- Competitive Advantage – Cost savings from offshoring can be passed on to customers through lower prices. This gives companies a competitive edge in the marketplace.
Myth 3) Lower Cost of Offshore Resources Means Poor Quality
Some businesses believe that lower pricing equals poor quality. However, this is not always the case.
Popular offshoring destinations such as Pakistan produce thousands of IT experts annually. These professionals put a lot into honing their skills to offer a competitive advantage to their clients and, of course, ensure quality deliverables.
Moreover, companies themselves may be to blame for the poor quality. This can be due to many reasons, including –
- Opting for the cheapest option
- Rushing to hire and assemble staff
- Selecting unqualified individuals
- Rushing teams to meet strict deadlines
That is why organizations need to vet their offshore resources thoroughly. The goal is to find established offshore partners with a great track record and reasonable prices.
Myth 4) Communication Will Be an Issue
“Offshore resources cannot speak English.” Not only does this statement oversimplify a complex issue, but it also propagates a stereotype that negatively impacts collaborations between teams from different parts of the world.
Firstly, language proficiency varies among individuals, regardless of their location. In any country, you can find highly skilled developers who are fluent in English and capable of effective communication. Conversely, you can also find native English speakers who struggle with clear communication.
It is also important to highlight that IT professionals have a good command of technical English, which is crucial for coding and software development.
Another aspect to remember is that effective communication is not limited to language proficiency. It also covers clear and concise communication, active listening, and understanding cultural nuances. Therefore, miscommunication can happen if these aspects are not addressed.
Language barriers aside, various tools and practices can facilitate communication and collaboration among global teams. Video conferencing, messaging apps, and agile development practices enable teams to work together seamlessly, irrespective of their physical locations.
Myth 5) Offshore Resources are Taking Jobs Away from the Locals
Offshoring IT jobs causing a significant loss of employment opportunities is a very persistent myth. However, there are several facts that easily disprove it.
- The job market dynamics are complex – Claiming that IT offshoring is solely responsible for job losses oversimplifies the dynamics of the job market. Job creation and job loss in the IT industry are influenced by factors like technology advancements, market demand, and domestic economic conditions.
- Companies offshore resources to remain competitive – Organizations seek cost-effective solutions to stay competitive, which can lead to creating offshore teams. In the meantime, they can allocate more resources to innovation, research, and higher-value roles domestically. This, in turn, leads to the creation of new jobs.
- Local employees can opt to reskill in the meanwhile – While certain IT jobs may be handled by offshore teams, there are ample opportunities for local workers to reskill and adapt to the changing landscape. Investment in education and training programs can help workers acquire the skills needed for high-demand IT roles.
- Offshoring can contribute to economic growth – The globalization of IT has contributed to the growth of the technology sector as a whole. This growth has a positive impact on the economy, fostering innovation, entrepreneurship, and the creation of new companies and jobs. Take for instance the US market. While 2 million jobs were lost due to global trade over 20 years, 35 million new jobs were added in half the time.
So, it is possible to harness the benefits of offshoring while simultaneously supporting the growth of the domestic IT job market.
Myth 6) Offshoring Can Put Data Privacy and Security at Risk
While concerns about data privacy and security in offshoring are legitimate, the location of service providers alone does not inherently pose a risk.
Reputable offshore partners prioritize data security and often have the expertise and infrastructure in place to protect sensitive information. In fact, they may address these concerns effectively via –
- Investments in security measures, infrastructure, and compliance with international data protection standards such as GDPR
- Adherence to stringent data protection regulations and compliance standards
- State-of-the-art technology and cybersecurity experts who are well-versed in safeguarding data
- Legally-binding confidentiality agreements and contracts for maintaining data privacy and security
- Internal security measures, such as encryption, access controls, and employee training
- Mechanisms for continuous monitoring and auditing to ensure the efficiency of data protection practices
You too have a role in ensuring the safety and privacy of your data. You need to carry out thorough risk assessment and due diligence when selecting offshore resources. This involves evaluating the provider’s security practices, past performance, and reputation in the industry.
Myth 7) Offshoring IT is Unproductive and Only Useful for the Short Run
The geographical distance and difference in time zones tends to make businesses believe that offshore development teams are unproductive.
However, long-distance communication is no longer a challenge thanks to internet-powered apps. Moreover, offshore resources ensure overlapping hours for meetings, check-ins, and reviews.
Because of these and the above facts, offshoring is a good business investment for the long run. Your remote teams will shoulder the work and help you meet your business goals. They can further make your processes more efficient with time.
Got Any Questions or Myths on Hiring IT Offshore Resources?
You can contact us via the form below and we will make sure to address your concerns and answer your questions. Let us ensure that your business does not miss out on the benefits offshore resources and teams can offer.