Offshoring R&D with 70% savings

Offshoring is taking the over traditional outsourcing in the information technology (IT) industry and opens up a fresh look on capabilities and opportunities for expansion, growth and global presence. 

IT firms have high level requirements for security. And with the growing trend of setting up research and development (R&D) centers elsewhere gives rise to key considerations on confidentiality and security. Setting up shop offshore becomes a middle ground for security and business growth opportunities. 

Dmitry Ovcharenko, CEO of IT-centered business process outsourcing (BPO) firm Alcor in a piece he wrote for Forbes shares that in his 15 years of experience in the sector he has seen how IT companies can encounter problems with outsourcing. 

Global talent pool

Here, offshoring rises to the occasion. Unlike traditional outsourcing, offshore R&D centers establish the presence of a business abroad and can significantly reduce expenses. All while giving more freedom and access to a global talent pool.

Both small and large firms can benefit from offshoring R&D facilities. Being overseas, it provides access to specialized engineers to startups and allows larger players to expand into new markets.

Legal concerns

Ovcharenko advises that the first point to take into account is the legal side of moving part of your business abroad. IT companies preserve the confidentiality of their products. And offshoring requires sharing information with the offshore team. So, it’s important to establish the means of ensuring data security. He said companies should take care of intellectual property rights and non-disclosure agreements.

Attracting talent

Attracting experienced engineers requires strong branding. Ovcharenko says when a company is known to the local market the chances of job offer acceptance increases.When you make your company renowned on the local market, you increase the chances of job offer acceptance abroad. He suggests getting one reputable human resources (HR) service provider instead of getting several onboard.


Choosing where to set up an offshore facility is the core of it all. It dictates a company’s access to great talent and the amount of money saved. Somewhere that is not overly saturated with IT companies is a good place to start. That way companies do not have to compete for resources. It is also good to consider the average salary in the country. This will make it much easier to find a team and reduce costs at the same time.


Most of the time, putting up an offshore office requires partnering with locally operating firms. It is important to select a partner with proven expertise in the IT industry and tech recruitment. 

Doing some research and due diligence should do the trick. Remember, a trustworthy partner can assist in navigating through local labor markets, government agencies and the local IT industry. It helps to get a consultant that can help build strong government relations as well. 

If done correctly, setting up an offshore facility can save any company up to 70% in expenditures.

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About Derek Gallimore

Derek Gallimore has been in business for 20 years, outsourcing for over eight years, and has been living in Manila (the heart of global outsourcing) since 2014. Derek is the founder and CEO of Outsource Accelerator, and is regarded as a leading expert on all things outsourcing.