Being in the IT industry for 15+ years, most of which, I have also been an integral part of the technology offshoring, I can share some basic pros and cons of offshoring your technology needs…
The technology offshoring matrix:
Factors |
In-house |
Off-shoring |
Side-Effects / Comments |
Cost |
High |
Comparatively Low |
- Possible Impact on Quality because of communication issues
- Possible impact on cost at the later stages
|
Quality |
Medium |
High-Medium |
- If the needs are communicated efficiently then the quality from a service provider is very high
- In-house employees sometime tend of let it slip, but the control is higher
|
Specialized Skills |
Low |
High |
- Easy to find providers with the skills needed on contract in comparison to hire someone with the skills
|
Communication |
High |
Low |
- Linguistic barriers
- A bad communication can lead to ngative cost and quality impacts.
|
Business and Company Knowledge |
High |
Low |
- A definite impact on quality, especially if the provider does not understand your business
|
Contractual Obligation |
Medium |
High |
- The provider feel obligated to complete the work, having said that my experience has been that if pushed it has a very bad impact on quality.
|
Social and Cultural Knowledge |
High |
Low |
- Again major impact on the outcome and quality of the work as the provider or it’s employees do not understand the needs as a consumer
|
Staffing Issues |
High |
Low |
- No HR, Insurance or payroll issues
- Having said that don’t forget that the provider also has employee retention issues, which may have a big impact on your projects quality
|
Managerial Control |
High |
Low |
- Possible impact on Cost and Quality
|
Security and Confidentiality |
High |
Low |
- Could be a business issue
|
Transparency |
High |
Low |
|
Hope this matrix helps, also read my article on Parameters to consider before hiring an offshore provider
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