The rising demand for software engineering and IT engineers is increasing daily. Thus outsourcing and offshoring have created much buzz. Significantly in the IT sector, outsourcing and offshoring are quite common terms. Both of them are used because they provide remote work benefits. So is outsourcing correct for your company? Or is the offshoring good for your company? Although the benefits are the same, certain things make offshoring and outsourcing different. We will help you to know whether offshore vs outsource is best suited for your company. 

What exactly is Outsourcing?

In outsourcing, the company contracts the work to a different party or third party. Instead of doing their work independently, they hire a third party. Some people even consider outsourcing similar to contracting work. Most companies prefer to outsource their work, such as legal or PR work, to different firms within the same country. Moreover, outsourcing does not mean to be a way of saving money. Hiring a third party could be expensive.

Benefits of outsourcing

There are multiple reasons for a company to outsource. However this might be a sensitive topic, but management experts believe that outsourcing right away can enhance competitive advantages. There are various reasons for doing so which include:

• Cost advantage: The major reason for outsourcing is high cost. Many companies find that giving work to third parties can be cheaper. Hiring a third party or external agency service is much cheaper than setting up in-house operations. 
• More focus on competency: In an organization, many business functions exist. For example, information technology, human resources, manufacturing, marketing, sales, accounting, payroll, security, finance, logistics, transportation, and others. Some of these roles are not the core part of the company. The core activity provides competitive advantages to a company over competitors. Customers choose to conduct business with the firm primarily because it excels in this activity compared to the competitors. So handling the non-core part of the company can be a big distraction, so the company outsources the non-core part. 
• Quality and Capability: Sometimes, companies don’t have the expertise required to perform certain functions or activities. So in such cases, it becomes extremely important to outsource such work. The resulting services or products then would be of high quality. 
• Improves Productivity: Productivity can be improved by outsourcing selective business processes. This way, the company will focus its resources on the main business functions. 

The money saved due to outsourcing can be used to fund programs that can generate revenues. For instance, the money can enhance promotional and marketing programs and improve the business infrastructure. Moreover, outsourcing can allow the company to ramp work up & down easily. Let’s understand this by an example; the company may require a large number of software programming professionals for only about 6 to 7 months to create an application. Therefore, it might not be profitable for the company to hire an expert just for six months. 

What exactly is Offshoring?

This is an operational work of a company in another country. The purpose of this is to save money. Unlike outsourcing, where the contracting work is shifted to different companies, offshore, the work remains in the same place. In the case of offshoring, the work is only shifted to a different place or another country, but the employees are only for your company. We can consider it offshoring if you want to contract work to a different firm with operations operating in another company. That means if a company is working in California and there is another firm or company in a different location, such as in another country, they can offshore their work. The reason for offshoring the work to a place where the company might not need to invest much and get benefits from fewer taxes and lower wages. 

Benefits of offshoring

Various European and US-based companies are running more due to offshore services to develop software products. There are various reasons to select offshore development companies, especially for their software services. So here are some of the benefits associated with outsourcing; 

• Cost savings: Just like outsourcing, companies’ main reason for offshore services is to developing countries where the wages are quite low. It would benefit the company as they don’t need to invest much. The savings made by this method are ordered and transferred to the shareholders, customers, and company manager. 
• Skills: Certain companies develop better ecosystems, which is essential for establishing certain industries. It means that there must be good availability of HR in the specific region to perform certain tasks. For instance, countries like Bangladesh, Vietnam & Philippines have large numbers of people who speak English, have the training, and infrastructure, and have university-educated youth, which makes them the best place for outsourcing. 
• Close Collaboration: With the help of offshoring, companies get control through physical collaborations. The shared collaboration has the benefit of overseeing work without delays and filters.  

So this is the comparison between offshore vs outsource. So both of them are important for the company.

Benefits of offshoring in Bangladesh

There are certain companies that are growing as offshore software Centres for development. Bangladesh is among the leading offshore development company throughout the globe. It’s becoming more popular yearly, leaving behind many countries like China and India. 

The reason for such immense growth is that the development prices are quite low. There are various skilled people and professionals. Compared to other countries like the USA, outsourcing companies in Bangladesh are nine times more reasonable. Bangladesh’s offshore application development organization provides services to big countries like the UK, USA, Japan, and Canada. 

Another major benefit is the language. Most people speak English and have the top level of the education system, which creates high-potential, talented youngsters. Mostly the youth of Bangladesh is hard-working, proactive, and tech-savvy.

Summing Up

Both offshoring and outsourcing are important to enhance the performance of the company. So it isn’t easy to define between offshore vs outsource. Various tasks can be made possible by outsourcing and offshoring. Both of them are equally important. It’s hard to define which one to choose. Some companies even combine outsourcing and offshoring. With this, the company can easily focus on its growth and core competency. So if you are looking for the best outsourcing and offshoring software development providers, you can get your work done at https://iotait.tech/. Their services improve and enhance business growth and provide high-performing solutions. So go and grab this amazing opportunity!