| Cost management: |
| Offshoring can help you manage costs in two ways |
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| Cost Reduction: |
| The effective savings due to offshoring with a vendor in a country like India are between 35 to 65 percent. This is due to savings in the form of lower wages rates, infrastructural and communication costs, etc. This cost reduction in turn can either be used as net savings to your firm’s bottom line or reinvested in business generation activities. |
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| Fixed Cost Reduction: |
| Offshoring transforms various fixed costs such as employee compensation and capital investment into variable costs, by sub-contracting your operations to an external provider, thereby leaving you less prone to market volatility. |
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| Greater capacity and increased service levels: |
| Offshoring provides the opportunity to do more with less or get more resources focused on numerous areas with reduced budgets. This is possible only with offshoring due to the high value proposition offered because of your net saving per dollar. |
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| Access to talent: |
| Due to the emergence of a close knit, communications intensive global economy, you can increase your skill set procurement area. Highly sought after skills maybe acquired at a considerable discount from remote geographies. |
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| Quality: |
| Due to their vendor status, a higher delivery quality can be expected from your offshoring partners. Moreover, a part of the huge savings generated by offshoring can be reinvested in creating more stringent quality assurance procedures. The net result is that offshoring can help you refine your QA processes. |
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| Value and Productivity improvements: |
| Because of the significant cost differentials between countries, the amount of work executed per dollar is significantly higher due to offshoring. Moreover, due to time differential in the case of countries like India (12 hour time zone difference), a US firm can enjoy a virtual 24 hour work day. |
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| Compressed time to completion: |
| This 24 hour work day, in turn, leads to faster turnaround times. For example, if a hypothetical project requires a 6 month project execution timeframe, the same can be completed in 3 months due to integrated project execution strategies between onsite and offshore teams. |
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| “Around-the clock” support model: |
| With an offshoring capability, an organization is able to offload its support requirements that come in during odd hours to lower cost resources in the middle of their peak productivity time. Support communications such as emails and phone calls can be routed to remote agents who provide round-the-clock assistance. |
