Companies in the West can obtain access to a large talent pool by creating an offshore development center in nations like Viet Nam, India, or China. This allows them to scale swiftly. Offshoring, on the other hand, has grown in popularity due to one factor: cost.
The fact that you could hire talent at a significantly cheaper payroll is attractive to a lot of companies who are looking at tight IT projects. Can you go overseas and lower your operational costs enough to boost your profitability in this situation? What are the true financial advantages of hiring an offshore software development team?
Common cause of cost overruns in projects construction
Many case studies from all IT projects fail, often in spite of overshooting their budget.
- An unrealistic estimate of the budget
- Changes in the scope of the project
- Serious Project Design Errors
- Administration Errors
- Poor Site Management
- Not Hiring the Right Team
How can offshore teams become financial game-changers
For example, you have a 20-person in-house team in New York, one of the world's most costly cities. Now, if you hook up with an offshore development firm and recruit the same team in Viet Nam, the salary difference is significant. We're not talking about "low-cost labor." We're discussing value for money with the same ranks and the same quality.
What is the difference
Due to the reduced cost of living, an average developer's income in Viet Nam is at least 3-4 times lower than in the West.
This gives employees more disposable cash.
In addition, there's the entire cost of running your business, which includes things like office space, administrative costs, and legal fees.
What does this mean for your company
By cutting labor costs by at least a half without reducing output quality, you can save a large amount of money that can be put to better use. This ensures that your IT project budgets aren't exceeded and that you have access to a qualified pool of engineers. It's a win-win situation!
|Region||Lowest Hourly Rate ($)||Highest Hourly Rates||Lowest Monthly Rate ($)||Highest Monthly Rates ($)||Top Countries|
Ukraine, Poland, Romania, Hungary, Bulgaria, Belarus, Czech Republic, Austria, Slovakia
Mexico, Brazil, Colombia, Peru, Chile, Argentina
Morocco, Kenya, Nigeria, Egypt, South Africa
India, China, Philippines, Pakistan, Nepal, Bangladesh, Vietnam, Indonesia, Malaysia
What could a dedicated offshore team do
First and foremost, the offshore team you build is yours.
This means you'll be able to collaborate with like-minded people who share your company's vision and objectives.
Their goal is simple: to make as much money as possible for your company while learning something new day to day.
Offshoring also enables you to grow your team at a rate that is convenient for you. So, if you ever take on more clients than you can handle, you'll always have the support of your offshore crew. This entails improved planning and laying a solid foundation, which decreases the risk of budget overruns.
These are just a few of the numerous financial advantages of moving your business offshore. If you're interested in learning more about the outsourcing concept, check out our blog, which includes a guide to offshore software development.