I recently read, an older but excellent article about IT offshore. The articled described some good views on IT offshore and yet the first comment was regarding labor costs.

I am still wondering why labor costs continues to be so central to many when talking about IT offshore. Of cause costs are important within all businesses, but there are many other aspects that are actually more important when the topic is IT offshore.

Why is it that when we hire IT onshore employees we look at competencies, value for the company and labor cost. While the order is the opposite in the case of an IT offshore employees?

All the other costs related to an employment like rent, workstation, social costs etc. are often forgotten when recruiting for oneself. Often the discussion is all about us and them and sometimes it seems to be the argument against the use of IT offshore competencies.

I think this situation is a pity for many companies. Skilled IT resources in an ODC (Offshore Development Center) could not only gain economic benefits but also secure strategic benefits in a number of other areas. With a unilateral focus on financial savings, the focus is removed from areas such as access to a larger talent pool, access to a higher level of competence and not least highly motivated employees – all factors that can have far greater significance for most companies

My argument is that even though we, as a provider of IT offshore, often are able to offer solutions which are cheaper than a similar setup in Europe or GCC, there are other very important areas companies should focus on. A company should take a closer look at the strategic benefits that follow from a decision to use offshore resources.

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