In the wake of recent economic troubles, China has focused on turning their country into the leader for tech industries such as electric cars, robotics, and microchips with the Made in China 2025 initiative. This announcement will likely encourage U.S. companies to reconsider offshoring, but as you plan, remember to keep your long-term strategies and company objectives at the forefront of your discussions.
Your Top Consideration Should Always Be ROI
Tech decisions in a company usually fall under the responsibility of the CFO because every tech decision these days is also a strategic decision. Or, at least, it should be.
Companies focused on growth consider all investments in terms of how they benefit the long-term strategic goals of each part of the organization, from the reception desk to the boardroom and beyond.
As you make your decision on whether to offshore important tech development or keep the work at home, make sure to focus on your outcomes instead of your outputs and remember to weigh the hard-to-calculate nuances you’ll find in each consideration below.
- Agile Development
Reduced contact with your development facilities combined with lengthier offshoring timelines can decrease your ability to deliver the right tech product at the right time. In technology especially, market disruption happens every day. The longer you wait before releasing your solution, the higher the likelihood is that someone else will have released a similar product before you.
Your company understands what you’re looking for in your technology development, but no one there has the skills to create it. An offshore IT development staff has the skills you need… but they aren’t sure what you want. Bridging the gap by explaining your expectations is critical for an offshoring project’s success, but unless you’re adept with computer terminology, it’s unlikely you’ll be able to clearly express your interests across distant cultural and geographic lines.
One popular method for reducing IT development costs is to split a project into parts. That way you can assign some tasks to your at-home staff and assign other tasks to offshore workers. This technique can improve your timelines and increase communication between some of the groups, but it can also lead to a programming mismatch that eventually requires paying a third party to sort out and reconcile disparate code and logic.
Studies show that design is a key quality indicator for consumers, but “Good design, when it’s done well, becomes invisible. It’s only when it’s done poorly that we notice it,” (source: Jared Spool). Conveying a sense of quality through seamlessly invisible design is a tough thing to do. If your team isn’t sure how to explain their beliefs about what makes good design, they’ll have to rely on the method of “I’ll know it when I see it.” This method isn’t wrong, but it is hard to accomplish. Tweaking details is easier in an onshore facility than at one half the world away.
What made Apple’s iPod more popular than Microsoft’s less expensive and handier Zune? Why does everyone have Dropbox? Certain tech products deliver an indefinable… something that can be impossible to pin down. We’re going to call it “accuracy,” and we’ll describe it as “the right mix of benefits, convenience, and cool factor, sold at exactly the right time.” At-home facilities stocked with employees immersed in our shared culture may have a greater edge in intuitively understanding American consumer desires, but they also may not. After all, the iPod was produced overseas.
What’s the Right Choice?
In today’s fast-paced world, your company may benefit from onshore tech development that can pivot quickly in response to market disruptions, maintains standardization and quality consistency, and delivers exactly the product the market needs at the right time. On the other hand, it may better benefit you to offshore so you can free up capital for your core activities.
The choice of whether to onshore or offshore will have different benefits and consequences for every company because your ultimate decision will be based on your unique vision and mission. Only you can decide the right path for your future.
But you can get help.
When you’re ready to weigh all the onshoring and offshoring facts from the experts, contact ISG. Since 1991, we’ve helped clients achieve their strategic goals through our targeted blend of managed onshoring and offshoring facilities, as well as talent recruitment and outsourcing for in-office jobs.
ISG is happy to help you work through the outcomes of each option you’re considering. Contact us online or call us at (800) 739-2400 to learn more.