Offshore Development helps to increase ROI

QArea Expert by QArea Expert on June 25, 2012

Offshore Development helps to increase ROI
Reading Time: 2 minutes

offshore development

It is well known that your IT business performance depends directly on the way you optimize your budget. Because the most costs of any IT company are concerned with application development and maintenance, this clause is the first one to be optimized. And the best way to cut the development and maintenance costs is to use offshoring.

In fact, offshore development benefits have become known only twenty years ago. At the beginning IT companies delegated only miserable functions to the offshore software development centers. Nowadays, every small or large IT company is considering an option of delegating the entire development projects to the offshore centers. According to the up-to-date statistics, over 60% of American companies are already using offshore services.

Depending on several external factors and the power of offshore usage, an average company is able to reduce its costs up to 70%. For today such cost cutting is not a competitive advantage any more. This is a must have for any IT company that wants to survive under the modern market conditions.

Besides the labour cost saving there are other advantages of the offshoring as well. Offshore service also creates additional business values by releasing a money supply. Released money may be used in order to increase the quality level of company services, to reduce the time or to create a technology advantage. Thus, what do we have: cost of investment is decreased while gain from investment is increased; IT company gets an increased ROI as a result!

There are also several methods to maximize the advantages from offshoring for IT company:

  • Build rapport with your offshore provider. You should follow partner-centric approach in order to get all benefits of your partnership with offshore provider. Don’t think of him as a vendor but as a contributor to your success.
  • Remember about economy of scale. If you were successful in using offshore services try to expand this strategy and to get more from offshoring.
  • Think beforehand. Keep an eye on the market and always know exactly what user needs are next to be met. Strive to find new ways to low the total cost of your application’s maintaining.
  • Set right goals. Every other goal you set is to be higher than previous one. It’s the only way you can achieve steady increase of your IT business results.