Pros and Cons of outsourcing to India and other “low cost” destinations
30 October 2019
Many companies based in the United States outsource their web development from India and other overseas locations. The main reason they do this is that they are saving money. If you are also thinking about outsourcing to India, you may be wondering about the pros and cons that come with outsourcing. This is perfectly normal, and we want to help you by addressing these concerns, and getting your answers.
Why are businesses outsourcing to India?
Outsourcing is something that has been happening more business world as demands increase. You can consider it a simple process, an operation where jobs and tasks that would usually be done by your employees, are done by someone else outside the company. This is done using a contract usually and hiring a third party for a specific time.
When outsourcing to India, any web design related tasks that you are considering will be the lowest in price. However, the biggest challenge is to find the right candidates. Indian outsourcing can also take some of your time because there are a lot of offers to choose from. When you visit different freelancing sites, you will understand even better how competitive this market is.
Another interesting aspect is also that more and more companies are cutting down on their staff. The main reason for this is because of automation and redundancy. It is anticipated that in the next two or three years, more than 200,000 employees in India are going to lose their jobs.
Learn below more about this topic in this article created by our team at TMS.
What are the pros of outsourcing to India?
The most obvious reason people choose to outsource is to cut costs. If you are going to check the price without taking anything else to account, the cheapest alternatives are in India. Getting your own website can be at around a few hundreds of dollars. Mobile apps also go for a similar range depending on the complexity that they have.
The price is going to make you really consider outsourcing to India a good option. Why would you spend $4,000 when you can get it done for $400? India outsourcing can really be a wise choice for your budget.
Even for support related tasks, you can consider outsourcing. This means that you can focus more on the core tasks that your business has and let the support to somebody else.
Larger Labor Pool
Another reason why India outsourcing can work for you is that there are a lot of providers to choose from. Initially, there were also many freelancers or companies from India that did not deliver great quality. However, as the competition became bigger now there are very low chances of running into trouble.
Get access to different services
Many businesses offer different services for their clients. If you want to offer multiple services, this means a huge investment is needed. On top of that, there is also the risk of projects that happen only at certain times.
This is why outsourcing can be a great option that you can take advantage of when scaling. This also leads to the creation of a favorable environment, especially for IT startups.
What are the cons of outsourcing to India?
Poor management and poor quality
When you are working on a project, time is one of the most precious resources that you have. Time can get lost when you are doing client communication or translating requirements to Indian programmers.
If we look at the number of outsourcing India options, the number is huge. This means that there also going to be some cases when poor quality might be the result. Be careful when you choose and ask for a lot of past examples of work that has been done.
Even though investments are being done, sometimes, the difference is still too large. The reason behind this is because there is a strained power capacity due to international connectivity.
Sometimes, it might happen that the lights at an offshoring company can get shut a few times per day. This might lead to delays, which can cause a lot of problems when we are talking about project management.
Regional and Communication Differences
Outsourcing to India can also be difficult due to culture, time-zone, and language differences. You will have to adjust to the social and cultural norms and practices of your targeted partner.
Another thing needs to be considered is the time-zone and time difference. The difference is substantial if you are in the US, and you will need to find a way to adapt to it.
When outsourcing to India, you need to offer all the details of your project. If you accidentally leave out details, this will become a problem.
Make a brief, and be sure to include all the planning steps that you have in mind. Describe the idea you have and make sure that you focus a lot on communication. If you do so, your project has a higher chance to be successful.
Another tip would be to keep your communication in writing using email. This way you will be able to keep a better flow of your ideas and reduce the risk of errors.
Lack of Privacy and Security laws
The chances of getting a copied are quite large when you are choosing Indian outsourcing. What is bad about this is that these projects just get sold again and again, and you don’t have a guarantee that you will be kept secured. This is a big issue that many outsourcing projects face with copyright and licensing.
Therefore, we recommend that you sign a non-disclosure agreement (NDA) with the outsourcing partner you have. Indian laws are quite different from US laws, so clients need to mention some demands based on a contract. Be careful with this aspect and even consider hiring a lawyer, especially when we are talking about big-budget projects that involve a lot of money.
When you are outsourcing to India, it does not guarantee that costs are going to be cheaper. You may have to pay for extra costs due to services being done incorrectly, or other causes.
Other Outsourcing Destinations to Try
Besides India, there are also other players in the outsourcing industry. China, the Philippines, and even Vietnam are known for being reliable partners. China is very good at promoting their strength using media channels and is also quite low in costs.
In creative work, the Philippines have garnished some reputation in recent years. So, you may want to consider the Philippines when you want some creative juice in your project. In terms of customer support and VA, research shows a lot of success from hiring from the Philippines.
Vietnam has invested a lot into its economic resources and focuses a lot on IT and software outsourcing. Similarly, to India, Vietnam is also becoming a popular software producer for many global technology companies.
Still, if you want quality services, we recommend using top-notch developers like the ones we have on board at TMS.
If you enjoyed reading this article on outsourcing to India, you should check out this one about nearshoring.