What is Onshore Outsourcing?
Companies always find outsourcing to be one of the most convenient methods of distributing their workload. This way the company’s own employees can focus on their own tasks, and they can be liberated to do other pressing tasks. It would help preserve the company’s resources for other projects that need their expertise. This way the companies can reduce and control costs of operation considerably.
In this article, the topic of discussion is onshore outsourcing and its benefits. But first let’s examine why companies actually need to outsource their work?
Reasons why companies outsource their projects
- When companies want to make more room for growth
- When they want to cut back on resources
- When they need expert talent on a project
- Save on operational costs/labour costs
- Increase the productivity of the in-house team
- When they don’t want to go through the hassle of multitasking
- Focus on more competencies
- Perfect when companies want to scale
- The present employees can continue working on their core competencies
Types of outsourcing companies opt for
There are different kinds of outsourcing depending on what companies need and what their purposes are:
- Offshore outsourcing
- Onshore outsourcing
- Nearshore outsourcing
While offshore outsourcing is all about outsourcing the project to totally another country in a different timezone, nearshore outsourcing is outsourcing project development to a different country in the same time zone. Onshore outsourcing is different because it is all about outsourcing the work to a team that resides in the same country.
What is Onshore outsourcing?
Onshore outsourcing is also known as Domestic outsourcing and is designed to eliminate or reduce the usage and adoption of a company’s internal IT infrastructure and thereby control the total costs incurred by the company. It works almost like offshore outsourcing, but the service provider will have offices within the same country. The team will also be in the same country as well. Companies looking for strict legal and operational requirements prefer to go for onshore outsourcing.
Benefits of onshore outsourcing
Onshore outsourcing will take a huge load off your team’s shoulders, especially when the team members have so many functions to perform. This is why companies prefer to have an alternative team to delegate some of the work.
Onshore advertising is also a good idea when your in-house team has work outside of their core competencies. So rather than forcing them to do something they are not familiar with, you can hire a different team to focus on those areas. Many companies, both big and small, prefer to have an extension of the team in the same country, because they can connect with them any time they need to.
This is because of the multiple benefits of onshore outsourcing:
1. Communication ease
Since language differences are pretty rare in the same country (maybe only subtle differences in the dialect), it would be easy to communicate with the new team. Often, the biggest obstacle in offshore outsourcing is communication, caused as a result of language differences. For any business to be successful, fluency in language is an important criteria.
2. Time zones
Another problem with working with offshore companies is that their work times are different. Even though many companies manage to work according to the time zones of their employer company, it might so happen that the response time would be slower in case of emergency or immediate work. Both the team (in-house and the onshore outsourced team) will be awake at the time, making collaboration and communication easier.
3. Cost saving
Onshore outsourcing saves money because companies do not have to hire a team and spend time and resources to train them or to give them space in their office. The companies might not be saving money on salaries or minimum pay, but they can always resume work without a break once the onshore team is set. However, when it comes to paying salaries, offshore outsourcing is always much better in cost-saving. When in-person meetings are needed, you don’t have to travel halfway across the world, and that is another cost-saving move. Though the cost-saving difference may not be hugely significant, it will be in the long run. The combination of efforts will bring better ROI.
4. Easier integration with the internal team
Since both the internal and external team are from the same country, they will collaborate better. There isn’t much time wastage in breaking the ice because they might already have the same culture, and there is no worry about the other team understanding the contextual meaning in conversations. They are likely to get along seamlessly with each other from the first meeting.
5. Availability of infrastructure
With onshore outsourcing, you don’t have to worry about getting the infrastructure ready for the new team. It will be available with the service partner that provides the onshore team, and they will have the latest infrastructure, updated with the newest technological trends. The team will also have thorough knowledge of the newest infrastructure so there will be no training time involved. Once you hire them, the work can be started immediately without delay.
6. Better quality control
Since the team is so close to home, you can enjoy better quality control during each stage of the project. And even if you need to meet with the team, you can meet with them personally, have physical demonstrations and give them a better understanding of what’s required. Since there are shorter travel times, you don’t have to worry about losing a day to meet with the team, and train them.
7. Better knowledge of the market
The local team in an onshore outsourcing scenario will have a better knowledge of the local market, they will be able to relate to what your company’s goals are. They can tailor the product to suit your market needs. And you save time here too because you don’t have to train them to understand the local market.
Understand the downsides
While there are so many advantages to onshore outsourcing, it is also imperative that you understand the downsides as well. Here are a couple:
Small team of experts
With offshore outsourcing and nearshore outsourcing, you have the option of getting expert talent from anywhere in the world. That means the expert pool is really huge. With onshore outsourcing, the talent pool is comparatively limited.
You can hire cheaper when you do offshore outsourcing, but when it is from your own country, the rates will be at par with what you pay your in-house team.
So now that you have understood the benefits of onshore outsourcing and the probable downsides they pose, it would be easier to make a decision on what would be best for your business and targeted ROI. Hope this piece has helped you make an informed decision on which is the best option for your requirement.
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The author: Sascha Thattil works at Software-Developer-India.com which is a part of the YUHIRO Group. YUHIRO is a German-Indian enterprise which provides programmers to IT companies, agencies and IT departments.
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