The Cost Trap: How Companies Get Offshoring Wrong
- Ojash Shrestha
- 4 days ago
- 2 min read
For decades, offshoring has been synonymous with cost savings: lower hourly rates, reduced overhead, and cheaper delivery. It’s the story that drove the first wave of outsourcing, but cost as the central narrative is a trap.
In my 14 years building Novelty Technology as an offshore delivery partner, I’ve seen this play out repeatedly.
"When companies approach offshoring solely as a way to trim expenses, the relationship becomes fragile."
Cost savings may justify the initial contract, but it rarely sustains the partnership. The clients who unlock the real ROI are those who treat offshoring as a strategic extension of their business, not just a cheap vendor.
The real ROI of strategic offshoring lives beyond the spreadsheet. It’s measured in speed, adaptability, trust, and value creation. Here are five principles for companies to move from cost-first to value-first:
Anchor partnerships in loyalty, resilience, and strategic depth from the start.
Treat time zones as multipliers by using structured handoffs and sync anchors.
Invest in Clarity with communication and prioritization for faster delivery.
Share strategy, not just tasks. Teams with context deliver value, not just code.
Track delivery speed, product quality, and team engagement as the true ROI signals.
When leaders move beyond cost and treat strategic offshoring as a growth asset, they unlock the real ROI: not lower expenses, but higher value. It’s no longer about finding the cheapest partner. It’s about building the right partner, one that compounds trust, accelerates delivery, and contributes to long-term advantage.
Cost might open the door, but it doesn't build the kind of partnership that delivers strategic value.
When I founded Novelty back in 2012, I sold offshoring on cost savings because that was the language the market spoke and at the time, it worked. But over the years, I have seen the limits of that market.
About the Author
Ojash Shrestha
President | Novelty Technology
Connect with Ojash on LinkedIn.
