Using outsourcing has various advantages and disadvantages. To gain insight into the advantages and disadvantages, we have listed them below:
The Benefits of Outsourcing
- Lower costs. In almost all cases, you will benefit from significant cost savings when outsourcing work to countries with lower production costs. A lower cost of living for employees will result in lower salaries. These lower salaries will then result in lower outsourcing costs. In addition, operational costs are often lower in other countries, such as Ukraine.
- Access to a large talent pool. Thousands of talented developers work in Ukraine due to government incentives. On the other hand, finding developers in the Netherlands is highly challenging, making outsourcing development work to Ukraine a great advantage. By outsourcing, you can reach professionals who are scarce in your own country or cannot be found at all.
- Significant time savings. When working with an outsourcing agency, the agency performs important recruitment activities. Therefore, you do not have to draw up vacancies, promote vacancies, interview, and select applicants; you do not have to train employees internally. It saves a lot of time because the outsourcing agency already has employees chosen in advance, so they do not have to be prepared for a long time.
- Ability to increase. By outsourcing partners, you can easily take on new clients and projects. Internal capacity will no longer depend on this, meaning you can grow faster. When hiring or setting up a large project, you can quickly scale up the number of employees that work for you. For example, various Daxx customers engage complete teams of dozens of programmers from Ukraine.
- Continuous workflow. By engaging an outsourcing partner, you can use a constant workflow. If you have your development team working in, for example, you and America hire a development team in Ukraine, you can utilize the capacity of the units 24 hours a day.
The Disadvantages of Outsourcing
It becomes more businesslike. It isn’t easy at first for those used to personal service.
You no longer have everything in your own hands. You have no control over how and who with full outsourcing, only over what.
You are committed to a long-term contract. With outsourcing, agreements usually run between three and five years, while an organizational structure can suddenly turn entirely over. So, consider carefully whether outsourcing fits your organization’s long-term strategy.
- Time difference. Sometimes, the time difference can be both an advantage and a disadvantage. Communicating with a development team in another country or continent during office hours is occasionally challenging. A significant advantage of outsourcing in countries like Ukraine is a minimal time difference. It makes communication a lot easier.
- Language barriers. A language barrier can result in miscommunication and extra effort in translating the requirements and wishes. It is, of course, not the case if you speak the same language as your outsourcing partner or if an employee speaks your language. When outsourcing in nearby countries, it may be a good idea to go to the outsourcing partner and schedule a meeting with the employees who work for you. For example, it is possible to make an appointment with Daxx at the office in Ukraine, where the wishes and requirements are discussed directly.
- Different work cultures. Different cultures rule in other countries. Because of these cultural differences, it can sometimes take some getting used to working together. It is also possible that the workflow is interrupted or that miscommunication occurs. That is why it is necessary to understand the country’s cultural differences after you outsource your work.
- Greater travel distances. Because the distance between you and the team that performs work for you is more significant, it will also take more time to visit the outsourcing partner. It also entails additional costs because a plane ticket is more expensive than an hour’s car journey. With a view to the offshore outsourcing of product development or software development, travel times are also critical. Even when you do not have to travel yourself, there are often documents and parts of files that it must send. That takes time, and that is not always desirable.
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