So today I’m going to talk a bit about our business and what we do. We are technically an digital outsourcing agency that does the main work offshore (in our China office). While the term ‘offshore’ is something people understand very easily, Plus Factory is really an onshore/offshore model. Our US team is as important to our operations as the offshore team, but that is something to discuss in another post in the future.

Digital outsourcing is very common in the advertising/marketing world. Most agencies do not have the capabilities to build and launch complex online campaigns and websites, so they bring in these outsourced ‘specialists’ to execute on their ideas. A famous case would be Crispin Porter & Bogusky. While they have won numerous “Interactive Agency of the Year” awards, and won awards for their interactive work…they actually practice the art of hiring top notch digital vendors to build the programs they take credit and awards for. There are many great digital vendors in the US, like Big Spaceship, The Barbarian Group, HUGE INC to name a few. Now when you start getting into offshore outsourcing, its a different ballgame.

When Clients look to into offshoring their digital work, the number one reason is price. They are looking for an cost-effective way to produce the work. That is the universal truth. Now when you get past this statement, then we deal with two types of  Clients, one who still are looking for US quality work with the low price and the other who really wants a great hourly rate. Now this latter Client of course still needs the work to be acceptable and on par with US standards but price is the underlying criteria for them.

This is the Client I would like to go into more detail with and talk about the ‘Offshore Equation’. This Client will push the hourly rate from you, and like some sort of an bargain-basement retail hunter, will tell you how they can get better deals for the same level of work. This Client takes the hourly rate as the true worth of the offshore vendor and the value they bring. This is the absolute biggest fallacy that we face as a business and brings up the term I call the ‘Offshore Equation’. 

The false equation that Clients would believe for offshoring is thus: hourly rate = value

The true equation that we believe in is: hourly rate x efficiency = value

You can’t simply look at the hourly rate but also at the efficiency of the vendor. A perfect example is say Vendor A charges $25/hr while Vendor B charges $50/hr. Now if Vendor A takes 3 x as many hours to complete the work compared to Vendor B, then you are paying more for Vendor A to complete the work, even though Vendor A has an lower hourly rate.

One of our core strengths as an outsource vendor is to offer competitive prices (ie our savings doing the work offshore is your savings), while still delivering incredible, dynamic, US quality work, in fast turnaround times. This is on top of the leadership and management that works with our Clients and oversee the work.

The ‘Offshore Equation’ is the hidden truth that many Clients do not realize when they look to engage with an outsource ‘offshore’ group. Sometimes Clients learn this the hard way and have a bad relationship on a project and the Vendor. All we can do, as we continue to offer our knowledge, solutions and services is to educate our Clients on this true ‘Offshore Equation’.