Rightsourcing: how to benefit from offshoring IT


On 12 March 2014, the World Wide Web commemorated its 25th birthday. The internet has evolved to enable our corporate world to globally communicate in real-time via a diverse set of media. 

We have never been better equipped to implement strategies that stretch across all continents of the planet. Even start-ups working from their local cafe can build businesses with global operations, something that was near impossible pre-internet.

The benefits to offshoring IT requirements are clear. The average cost for an equally skilled web developer in India is a third of that in the UK. Continue further east to Indonesia and it’s possible to halve the cost again. In some cases, even Indian companies offshore their IT services to Indonesia.

Offshore services can be purchased on a rolling monthly basis, and so, should a particular contractor not fulfill the obligations, another can be sourced. This is a much less risky and less costly process than trying to hire, house, equip and train your own employees. It gives a business real scalability, as it can flex its resources from one month to the next across a broad range of services – be it hosting, software testing, web development, project management, quality assurance or customer services.

However, there are recognised challenges. In the first instance, once we decided that offshoring was the strategy for us due to the aforementioned benefits, we trialled numerous offshore agencies in our quest for the right partner. 

In some cases, we paid for services that we were never fulfilled.  In others, the services were below acceptable standards. One even imposed a cost increase on us that put their rate on a par with an onshore agency. In short, the process cost us time and money. But then this applies in equal measure to our experience with local contractors, so it is by no means a challenge exclusive to offshoring.

Another challenge that typically comes to mind is the communication barrier. Language can be put aside, as our current offshore team practically regard English as their mother tongue. However it can be difficult to relate your objectives via video conferencing and online collaboration tools. 

There are occasions when a five-minute face-to-face meeting would achieve so much more than a one-hour VoiP conference. And despite the phenomenal improvement in global internet connections, it is a seemingly impossible task to remove the gentle hiss on an international VoiP call!

Trust can be a major consideration. There is always a high risk when you’re granting an unknown entity access to your intellectual property. Risks can be mitigated legally, through the use of confidentiality agreements or intellectual property rights, or strategically by ensuring you only give the agency enough access that they can perform their duties, but not enough that poses any significant loss should infringement occur. 

>See also: Automation will not kill offshore outsourcing, Ovum says

There is also trust that the work is being performed by the right personnel and not being passed on to less skilled staff. Even more serious is the trust that your offshore team operate to ethical working directives, particularly when it comes to working hours and child labour. The recent labour violations by Foxxconn in China are a case in point.   Written assurances, frequent audits and site inspections can mitigate this.

Timezones can sometimes pose a challenge, although not in our case. We find it to be a benefit that when we come online, the offshore team has already made significant headway and are ready for a conference call to discuss some of their challenges. It means we begin each day having made progress whilst we were asleep.

It is a huge market. A cursory Google search for ‘Offshore IT’ brings up tens of thousands of listings all over the globe. Certain countries can be more favourable in terms of language, culture, cost, experience, human resources, education, infrastructure and so on. 

In our case, we weren’t particularly constrained to a particular region; rather we were more interested in finding the right partner. We trialled companies from Latin America to Eastern Europe and all across Asia, though we found a lot more choice and generally more maturity in countries like India. 

With India’s close ties to the UK, there were minimal cultural or language issues, and it has an excellent track record, with many leading blue chip firms having Indian offices, such as IBM, SAP and KPMG. 

>See also: We are entering the era of "industrialised IT", says Gartner

Be prepared not to get it right first time and so start small and build as confidence grows.  There is a learning curve and it takes time for both parties to settle into the optimal relationship. 

Engage senior stakeholders on both sides to ensure that plans are implemented swiftly and authoritatively. Communicate openly and early to make sure any kinks are ironed out quickly. If a particular team member is not working out as you hoped, make it known, as the agency you choose should have others on stand-by. 

Ensure the offshore team is well structured with team leaders and project managers looking after their clusters, and with account managers to understand your needs and implement change. 

Ensure that your processes build in as much communication as possible. We receive a daily task summary from each of our offshore team members, so we have complete visibility over their activities. We also have a short team call every other day to discuss ‘Plan, Progress and Problems’.  This gives us early warning signs if progress is not as we hope, although usually it promotes discussion on how we can solve a particular issue.

It’s important to treat the team as your own staff, and to motivate, incentivise, encourage and develop them. We ensure that our team have a clear understanding of our business goals; we share customer feedback and sales success wherever possible. You never know, they might still be working for you 20 years later and be an integral part of your organisation.

Finally, we would recommend not to part with your own internal skills. It is important to maintain a level of quality assurance and close management to keep the standards high, and to have that professional understanding for when you need to step in. 

Once you’ve got it right, it really can help your business scale profitably. Our business genuinely wouldn’t be the same without offshoring, so we have a lot to be thankful for.

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Ben Rossi

Ben was Vitesse Media's editorial director, leading content creation and editorial strategy across all Vitesse products, including its market-leading B2B and consumer magazines, websites, research and...

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