Five questions for Bitkollegen co-founder Franziska: What is responsible offshore IT?

We have received many questions in recent weeks.
About what we do, why we do it and why we do it the way we do.
Via email, LinkedIn or in conversations with friends and colleagues from Germany.
We’ve collected a few questions here and answered them for you. What is IT outsourcing or offshore IT and why is there a need to act responsibly? IT outsourcing/offshoring is the outsourcing of IT services that are provided without the physical presence of the employer/client – from anywhere in the world.
This ranges from individual orders, e.g. the creation of websites, apps, online computers, portals or other tools, to the integration of employees working in the outsourcing destination into teams at a company based in Europe.
Countries with a low cost of living and generally low income levels but a high standard of education are particularly popular for this.
This is also the case with India.
Many large tech companies, such as Google and Microsoft, employ thousands of people here.
However, if the aim of outsourcing is to get as much service as possible at the lowest possible price, this can have detrimental consequences.
It can happen that even for the destination in question, below-average salaries are paid, the employer refuses to cover health insurance, working days have 12 hours and employees who complain or do not perform can easily be replaced due to the overcrowded labor market.
This was also the case for some of our employees.
These stories gave us food for thought.
From the outset, we intended to implement working conditions in India that were similar to those in Germany.
But we also had to learn what was involved and are still learning how we can optimize the working conditions for our employees. What exactly do the employees get that they would not get with other employers in India? There are various things, I would just like to list a few: Health insurance, for example, which is not standard here, but an extra that the employer has to organize.
For a few euros more, you can also include the employee’s family.
This makes sense, as around 90% of Indians do not have health insurance.
Another thing is flexible working hours.
Our office is open from 8 am to 8 pm.
Our employees can organize their working hours flexibly within this time window.
They are also allowed to work from home, but this is hardly used at the moment because our new, fully air-conditioned office offers comprehensive comfort at work and is currently very well received by our employees.
We also want to promote well-trained young women.
There are a lot of them here, with good degrees and several years of professional experience.
However, when women get married or have children, most employers in India only give them the option of returning to work full-time or not at all.
This means that a whole group of qualified specialists are no longer available on the labor market.
We try to give these women the opportunity to stay in the workforce by offering part-time work and home office as required, for example by allowing them to work 15 hours a week on projects despite starting a family.
Finally, the promotion of women also means that we take responsibility for transportation from home to the office if necessary, e.g. by cab or a driver, so that our female employees who do not have a vehicle themselves do not have to worry about their safety. Why should German or European companies be interested in the working conditions of employees at an outsourcing service provider? In general, I think every company that buys a service should be interested in how it was provided.
There are of course certain markets in which it is practically impossible to obtain products that are truly sustainable.
Everything that has to do with rare earths, for example, falls into this problematic area.
falls into this problematic area.
This is not the case in IT outsourcing.
However, I have noticed that purchasing companies have often not taken a close look.
Unfortunately, many other service providers in this area do not show transparently what the offices look like, for example.
What the offices look like and give an insight into everyday working life.
In addition, however, there are increasing requirements in Germany and Europe that even oblige companies to take a closer look at their suppliers and service providers.
These obligations currently come from the Supply Chain Duty of Care Act (LkSG), which will apply to all companies with 1,000 or more employees from 2024.
According to the LkSG, companies must check how suppliers treat their employees according to various criteria.
If they fail to do so, they may be subject to severe fines. In addition, a European supply chain law is currently being introduced that will apply to companies with 250 employees or more and has an even broader focus, e.g. on environmental and climate protection.
It can be assumed that the requirements for German companies to observe social and ecological conditions in procurement will become even stricter in the future. Social is all well and good, but there are also many environmental problems in India, aren’t there?
Do you also deal with them? Admittedly, we are still at the very beginning.
Our office is still under construction and we only recently completed and moved into one floor at the beginning of 2023.
Nevertheless, we have tried to tackle certain environmental issues where we have the opportunity to make a positive contribution.
In mid-March, we spoke to many members of the local community about the garbage problem in the streets and launched a joint garbage collection campaign.
We hope that we can continue this commitment through further measures.
However, there are many challenges here, because once the garbage has been collected, it is unfortunately far from being picked up or recycled in a way that conserves resources.
This means that we are probably reaching our limits here, but we will continue to address the issue of plastic waste.
Another thing we are looking into is whether we can run our IT entirely on renewable energy.
We are currently getting quotes for PV systems on the roof of our office.
This is actually logical, as the sun shines here almost all the time.
The electricity that comes from the grid, on the other hand, has a high proportion of coal-fired power (in 2020, for example, it was around 72%).
In this respect, you can actually make a direct positive contribution if you generate your own electricity from solar energy. Aren’t your services then much more expensive than those of other IT outsourcing companies?
Is your offer still attractive for customers? It’s true that price was and still is the decisive factor for companies from the USA, Europe and Germany when it comes to deciding on IT outsourcing.
In Germany in particular, however, there is another important factor: The shortage of skilled workers.
This means that companies do not necessarily want to save money, but have no choice but to look for specialists off the beaten track (Stepstone and the like).
This also means that price is no longer the only criterion.
In addition, as already mentioned above, the obligations under the Supply Chain Act are forcing companies to take a closer look at their service providers.
Then, of course, there are also companies that have made social or sustainability their corporate purpose, such as green startups or impact startups.
Due to their reputation, these companies cannot afford not to use socially responsible IT outsourcing.
Finally, we also assume that we can certainly keep up with the offshore IT sector in terms of price.
We may not be in the lowest segment here.
But it is precisely our meticulous and cost-conscious planning, naturally also thanks to the support of our Indian partners in building and setting up the office, that has meant that we have so far developed little overhead that we have to pass on to our customers.
To make things transparent for our customers and to make it as easy as possible for them to request a quote from us, we have also decided to break down our prices transparently in a price list.
You can find this on our website, for example.
This also sets us apart from most of our competitors, who only provide prices when a specific inquiry is made.