The Pros and Cons of Outsourcing and Offshoring in Testing & Project Services
With the landscape as it is today — the internet has enabled businesses to connect with people resources anywhere in the world to complete most tasks. As a result there is a rising debate over the pros and cons of outsourcing and offshoring. For many companies today, the that is the question. But the other question is whether or not either are worth it.
To outsource is to contract work to a 3rd party, say a Project Management company, for example, to manage the build of platforms or systems. To offshore is to have work done in a different country. Of course, it’s possible to outsource and offshore – engaging a 3rd party in a different country to complete this work.
Both outsourcing and offshoring come with a host of benefits, but they can both also come with many challenges, particularly in Testing & Project Services.
Here we will aim to explore both the good and the bad, to help paint a picture of the opportunities to be had and the challenges to be wary of.
Pros and Cons of Outsourcing or Offshoring
Let us start with the pros.
It’s pretty easy to spot the benefits of engaging a 3rd party. Typically there are only two reasons why a company is like to even consider it:
- They want to tap into expertise that they lack in-house
- They could do it cheaper externally.
Outsourcing is a pretty compelling option if there is a skill gap internally. Perhaps there are even staff that could do the job, but they may not have the same level of experience or support to bring the ideal level of expertise to the project. A 3rd party organisation, on the other hand, with a specialism in this area and expertise in outsourcing to various businesses, comes with a whole package around them – additional staff, experience, etc.
If you’re considering outsourcing, you may as well compare prices abroad, right? That is where offshoring is no doubt going to catch your attention. Offshoring to a 3rd party in a cheaper country will inevitably bring with it the ultimate benefit of cost saving. As the costs are lower, it usually means you can afford more people and get things turned around faster.
As with all good things, it’s not all good, all the time.
There are a number of potential downsides to outsourcing and offshoring. When you outsource work, communication becomes more difficult. Many organisations can take for granted the fact that everyone within the company knows their lingo, the vision of the company and the project. When dealing with a 3rd party, it can be tough to communicate these things and often will require conscious caution to change your language and thoroughly explain things that you would usually expect people to know.
This means that outsourcing can end up much more hands-on than one may initially think.
When you then take that offshore, the challenges only increase. In many cheaper countries, the geopolitical climate can be unpredictable, and the language difference makes communication even more challenging. Even if you’re dealing with people who speak perfectly, the lingo and Australianisms, again, may not translate, making it difficult for everyone to get on the same page.
Another additional factor that many businesses may not consider is that when they begin to rely on 3rd parties, they may be creating a skill deficit within the organisation, which brings a severe risk of overreliance where the 3rd party is the only one able to manage certain functions. This is pretty scary if you imagine that something happens to that business, could your in-house team take it all back and be able to stay afloat?
Outsourcing and offshoring can be a godsend, and many organisation utilise these services with amazing results. Should you do it or not? We can’t give those answers, unfortunately, but if you decide that you’d prefer to have those staff internally, whether permanent or on a contract, we can certainly help you there.
Give us a call today to help find the right Testing & Project Services person for your needs.