The cost model, with its assumptions shown.
Most offshore engineering providers quote a savings percentage. Very few publish what it was calculated against. Here is ours.
The headline figures
Design-based ODC engagements have reduced client software and operating costs by up to 60%. Resource-pool engagements have reduced operating costs by up to 42%.
Both are stated as "up to" because both depend entirely on what you are comparing against. A saving measured against a London consultancy rate is not the same as one measured against an in-house team in a lower-cost European market.
What drives the difference
Three components, in roughly descending order of contribution:
Engineering labour cost
The rate differential between a Pune-based engineer and an equivalent engineer in the UK, Europe, North America or the Gulf. This is the largest component and the one most people mean by "offshore saving".
Software licensing
In a design-based engagement, licences sit on IDAC's books. For a client who would otherwise buy seats for a temporary team, this is a substantial and often overlooked saving — and it is why the design-based figure is higher than the resource-pool figure.
Infrastructure and overhead
Office space, workstations, IT, recruitment and employment administration, all carried by IDAC rather than added to your cost base.
What the headline figure does not include
An honest cost model has to state its exclusions, because these are where offshore engagements most often disappoint:
- Your management time. Someone on your side directs and reviews the team. Industry experience suggests roughly one onshore coordinator per eight to twelve offshore engineers, depending on work complexity.
- Ramp-up period. The first weeks are slower while standards and expectations settle. Budget for it rather than being surprised by it.
- Rework during establishment. Lower with good governance, never zero.
- Communication overhead. Time-zone handover has real value for round-the-clock progress and a real cost in response latency.
Where offshore is the wrong answer
Work requiring constant, high-bandwidth interaction with your own engineers, work with very short turnaround where time-zone latency dominates, and work so novel that the specification cannot be written down all perform poorly offshore.
We would rather tell you that at the enquiry stage than discover it three months into an engagement.
Want the figure for your case?
Give us the roles, the volume and your current baseline, and we will model it properly rather than quoting a percentage.