Pros and Cons of Technology Offshoring

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	Cost impacts

Hope this matrix helps, also read my article on Parameters to consider before hiring an offshore provider