Offshore IT outsourcing involves sending certain types of information technology work overseas to be completed by independent third parties.
Why Companies Send Work Offshore
There are a number of reasons companies decide to send IT work to service providers outside of their own country:
- Lowering the cost of operations: This is almost always cited as a reason. Companies are under pressure to cut costs, and because of lower labor costs, service providers in other countries are often able to get the work done for less money than it would cost for the company to hire someone to do the work in-house.
- Concentrating on core business: If IT is not the company's main business, sub-contracting the work out will theoretically allow the company to concentrate on its core operations while allowing experts to take care of non-core functions.
- Taking advantage of a large talent pool: Certain countries have a very large supply of IT professionals, some with specific skills in niche areas, which may appeal to companies that need to get particular types of work done while saving money.
- 24/7 availability: Because of different time zones, companies can have people working on a project or providing IT support around the clock.
Popular Offshore Outsourcing Destinations:
When you think of offshore outsourcing, India often comes to mind, as it is probably still the most popular destination for IT offshore outsourcing. However, here are some other locations to which companies might send their IT work:
- Asia-Pacific Region: China, Philippines, Malaysia
- Europe: Czech Republic, Poland, Hungary, Russia, Romania
- Africa and Middle East: South Africa, Egypt, Israel
- Latin America: Mexico, Argentina, Brazil