How much can you really save by offshoring?

Offshoring as a practice has been around for quite some time and recently, with the rise of entrepreneurs and business owners, (and taxes) more and more people are warming up to the idea of consistent performance and results, achieved at a much lower cost! That almost sounds too good to be true, right?

Well, allow us to explain!

What is Offshoring?

Putting it in a simplified definition, offshoring is the practice of basing some of an organization’s services overseas, to benefit from comparatively lower costs. Tasks that would normally be carried out by an in-house team or sector are now easily assigned to a third party, which leaves the company at an advantage in terms of time and money – time which can then be allocated to other aspects of the organization and money that could be invested in furthering your business goals!  

To give you a better understanding, some of the ‘tasks’ may include a specific project, multiple activities, or an entire business function altogether. Outsourcing offshore just makes sense because companies no longer have to compromise on quality or performance since an offshore team does the work for you, at half the price!

The unbeatable pros!

Due to the digital era, it’s never been easier and more convenient to connect with people across the globe and to have smooth operations running online. What’s more is that after the global pandemic, organizations and studies have found that 77% of employees working remotely give better results and show an increased productivity rate. That can factor into your offshore team, wherever they may be from – as long as there is consistent communication, and a regular quality check, it is a route that all businesses should be considering. Offshoring also helps a company to keep complete control over their operations and manufacturing, ensuring that you’re aware and involved every step of the way!

One of the benefits also lies greatly in the cost factor because if there is a product or a service that can be produced cheaply overseas, it makes more sense to import it rather than to produce it locally. Much of this revenue is earned, return back to the country in wages for other employees, investment in research and development, profits for shareholders, and taxes for the government.

Not to mention, this method, if undertaken, helps to improve the economies of poorer and third world countries and establishes jobs for people who have the necessary skills, but not the opportunities in their area of expertise.

If you don’t want to take our word for it, here’s what one of the richest men in the world, Azim Premji, chairman of Wipro Limited, had to say about the matter, “The important thing about outsourcing or global sourcing is that it becomes a very powerful tool to leverage talent, improve productivity and reduce work cycles.” His company was one that underwent decades upon decades of diversification and growth to emerge as a world leader in the software industry!

How much can you benefit?

Companies that outsource work to third-world countries like the Philippines, India, China, and Pakistan can cut down their labor costs by 70%, even up to 90% in some cases! And this is all while providing their outsourced labor force with a decent wage.

South Asian countries are generally still developing so the minimum wages set in such countries are much, much lower than US and UK. This is a win-win situation; for your outsourced team and your business as well, as you can both benefit from each other this way.

There might be an odd concern or two, regarding the work’s quality since it is technically going to be produced and handled by a team from a third-world country. This, in no way, diminishes the quality or performance of your organization because when it comes to outsourcing, some of these countries, namely Pakistan an example, is regarded as one of the world’s market leaders! It is a hive of brilliant professionals, well-known for delivering quality IT services in the world.

Pakistan is making significant investments to enhance its IT infrastructure and project management; evolving over the years, into a global outsourcing powerhouse! From software development to nanotechnology and cybersecurity to cloud computing, Pakistan has a stronghold on high-end technological frameworks that are recognized worldwide.

To further demonstrate our point, let’s observe a specific, narrowed-down list of benefits from a company in Pakistan that specializes in this area; Prestige International.

Not only do companies gain up to 70% in terms of saving cost, Prestige also hand-picks a carefully curated team of employees that would specifically work just with you and towards your business goals. They offer complete maintenance of facilities for necessities such as technical equipment and assistance, IT support, and robust infrastructure to facilitate maximum uptime, up to 24 hours a day, seven days a week! Even the operational expenses like workspace, equipment, training, and other facilities, are all included as part of the package.

In Asia alone, Pakistani labor costs are about twice as lower as India’s and five times less than China’s! This will save you around 70% on employment costs, with increased productivity and no concession on quality. In today’s time, offshore outsourcing is a practical economic model, and all this highlights that offshoring helps to cut out one of the costliest expenses – labor. Dodging this cost lets you reinvest the savings into your business and increase your value proposition. This way, you shift to working on your business, rather than inside it.

So, are you convinced?

Supporting an entire IT department can be and in fact, is expensive; not to mention the amount of time and attention it naturally requires to grow. This is why outsourcing offshore, specifically, is popular not just for big companies but also for others. Offshoring can be used in all business spheres but the most demanded is the IT sphere — offshore outsourcing software development companies always have a job!