Is In-House IT Staff Burning Your Money?

February 16, 2024


Want to stop wasting money on your in-house development team? If so, an offshore development team is the way to go. It’s both time and cost-effective. Here at Cloud Employee, we offer a premium offshore staffing solution that helps companies hire offshore developers from the Philippines.

We understand that the emergence of COVID- 19 has sunk the resources of many companies. Some have had to cut certain corners in order to survive.

Engaging a third party individual or team in the Philippines to handle development is a great way to avoid the risk and investment associated with in-house staff. Countries Want to know more? If so, continue reading.

Why Outsource to an Offshore Company?

With the pandemic came the need for companies worldwide to make hard decisions regarding alternative business practices. In that vein, organizations are now seeking new cost-effective methods of operation, whilst still maintaining the rate of productivity. Outsourcing is one viable way forward due to its cost-effectiveness.

Outsourcing involves assigning specific company tasks typically performed by local staff to an external third party. And these operations can be carried out by an individual or a company. Due to the economic situation at hand, both large and small companies rely on outsourcing to avoid or reduce payroll and overhead costs.

Offshore software development is a viable way to maximize productivity in a cost effective way. Below are the advantages of hiring an offshore development company;

Control capital costs

This is not the only factor considered when outsourcing to an offshore development team, but it is undoubtedly a significant factor. The cost of hiring individual software developers to create an in-house team is relatively higher than hiring an offshore development team. Outsourcing also entails that there will be no need to buy equipment. Altogether, an offshore development team allows your business to get the same quality of work at a lesser cost.

Access to skills unavailable locally

Hiring an offshore software development team allows companies to gain access to global human resources and tools they usually wouldn’t afford due to cost restraints. The experts on your offshore team will seek to deliver world-class solutions when it comes to your business needs by leveraging advanced knowledge. For the most part, some are even more efficient and effective than what you’ll find in-house.

Facilitate business processes

Software developers do not come cheap, and the support needed to keep operations up and running is equally high. However, a good outsourcing firm will most likely already have access to the necessary resources to start the job right off the bat. As such, the parent company won’t have to worry about hiring, training, and supporting the team.

Unlike how it goes with in-house staff, offshore teams avoid tardiness with projects, time-consuming processes, and mundane tasks that can be curtailed to arrive at the same solution.

Competitive advantage

Some companies cannot develop specific projects on their own due to the complexity,  skill set, and the support services required. This may be due to their size and the resources they have available to tackle certain aspects of their operations. Outsourcing those projects ensures that such companies have access to the same services larger firms do at a relatively lower price.

The advantages of an offshore software development team are immense, but like everything else, there are disadvantages of contracting an external party to perform internal functions. Here are some cons of hiring an offshore software development team;

Communication gap

Communication is key if both parties are interested in a quick, efficient, and productive outcome. One of the main barriers to communication is language, which creeps up a lot when it comes to outsourcing.

Certain details will be overlooked in processes due to how each company interprets the information given to them.  It's even worse when they can hardly understand each other because that will end up fostering disunity and lowering efficiency.

Another barrier is the difference in time zones as it mainly impedes the flow of communication. Miscommunication further leads to frequent resolution of specific details, which eventually becomes problematic.

Limited control on processes

The outsourcing company will have to acquaint themselves with the fact that they cannot fully be involved in all stages and processes of the project. Without being physically present, all they can do is remotely monitor results at different stages and trust in the offshore team’s management.

The Most Popular Offshore Software Development Models

If you plan to hire an offshore software development team, it’s wise to research all the models in order to reach the right consensus on one. Here are the three most common models;

Classic

This model comes with a fully capable team that is headed by a project manager. Members of this team are chosen to ensure the overall team is equipped to handle your company’s technical and business needs. The team works closely with you and further updates you on stages, designs, and products. This makes it easier to request for changes and adjustments.

Branded

This model is ideal for companies seeking more control of all the outsourced projects. Here, the offshore company will create a structure while assuming all operational risks and taking care of operational issues.

Trust

This model is best suited for companies seeking maximum security and confidentiality. It is a good fit for sensitive projects that cannot be exposed until its completion. In this case, the team is given an offsite location to work from and are forbidden to share details of the project with anyone outside the team.

In the current financial climate, it has become inevitable for companies to cut costs by letting employees go. Software development outsourcing is a viable way out if you are looking to spend wisely while maximizing productivity. Nevertheless, bear in mind that your project size may sometimes determine the costs.

Just like everything else in the business world, an offshore software team will come with its gains and pitfalls. Be sure to equip yourself with both while researching the model that best suits your budget and project specification.

We hope you found this article useful. Here at Cloud Employee, we assist companies looking to hire dedicated offshore developers across many technologies. Talk to us, learn more how Cloud Employee works, or see our Developer Pricing Guide.