Offshore Software Development: How to Select Projects That Will Succeed

The central issue for a company in offshore software development is to decide the projects to be offshore. Company cannot just offshore any project, for the reason that the employees in developed countries desire to operate on fresh project development. This matter has to be cautiously thought .Offshore software development requires subsequent guidelines to be followed:

1. Company goal: It’s often said that goal are easy to make but hard to accomplish. Therefore, make certain that you identify your goals for offshore outsourcing well. Be clear on the factors that are attracting you towards offshore business. Is it cost only, or do you want to develop custom software rather than general software. Different reasons will give you different list of projects to be off shored.

2. Sufficient resource talent offshore: This reason basically depends on the technologies you use; you have to make sure that there is a tremendous resource talent. Struggle for the appropriate resources in countries like India is extreme; if you are in a narrow position and require spending hefty training dollars to get highly trained staff, you have to give a thought on how you can preserve your employees. This is because competition in the market is so high in terms of salaries that employees can easily leave your company for other if they are offered good salaries.

3. Deliverables and level of interface with the U.S. team: You should be capable enough to provide the adequate information to the companies you are dealing with. This will enhance the chances of success & will earn you huge income the next step involves the level of interface. How much interaction does the offshore team require to do with the U.S. team? This depends on the need of the offshore teams but it will take considerable management effort to make it profitable.

4. Specialized equipment or tools: If your development atmosphere involves specialized tools and equipment, it can affect monetary viability and schedules; it is also necessary to consider the time it will take to create the required environment offshore.

5. Cultural fit: Is it feasible to teach offshore employees within a rational time frame? For instance, projects that deal with user interfaces are harder to transfer because of the need to recognize the cultural issues in U.S.

6. Attracting and preserving offshore genius: If you are doing new development or you are in a strong technology area, this will work in your favor. If you are allowing for dated or proprietary technology with inadequate market demand or supporting energy, this will work against you.

Offshore Web Development India

The internet & the World Wide Web have become an integral part of our world. In approximately a decade the web has grown from a theoretical concept to a daily part of our lives. Most for-profit companies, non profit organizations, schools & universities either currently have web sites or plan to create them. The web has truly become the presence at all levels of society.

Offshore website development in India is growing very rapidly as web developers come up with better customer satisfaction. A day does not pass without a newspaper report about yet another company that has started outsourcing technology or other business processes to India. Why do companies go for web design and development outsourcing? The reasons can be the following:

India provides best quality services at low salaries. India possesses highly professional web developers which develop websites at much lower rates as compared to that of UK or US. India has a lot of scope for offshore web development. Companies can save a huge sum of money as salaries offer to an Indian professional is 5-10 times lesser than what is given to an US employee. Security is the biggest issue for any company but in India all security measures are taken to provide the services at best.

Following strategy should be helpful in offshore web development:

Good communication level: English is the language that is spoken by every country. Make sure that language spoken is understandable by the vendor & the requirements are clearly listed. This will prove beneficial when the final delivery is to be done.

Provide references: Give developers some links so that they can have an idea as to what kind of work you are expecting from them. Practical help is better than verbal aid.

Conduct meetings: Just outsourcing your project will not give you enough results. You should try to have meetings often or maybe some telephonic conversation to show how important the projects.

Feedback: Regular feedback helps to have better idea about the project work. Web design requires a lot of work to be done again & again .Its design is difficult to be finalized at one attempt.

Do You Need Back Office Outsourcing?

Business world is growing at a very fast pace these days. Companies are facing high competition, regular technological & market changes. So, they have to come up with the best products & services. Good services at the low costs are the mantra of success these days. But carrying support services in house may not yield you with the best results. So there comes the need for back office outsourcing.

The first question arises is -What is back office support?

These are the services which include internal administration activities & supplier relationships, involving human resources, procurement, warehouse management payroll activities & some other financial processes.

The next question which will immediately come into your mind is whether to opt for back office outsourcing or not?

Well the choice is completely depends on the company. Today, companies have to be completely efficient in delivering best services. Spending time on these non core activities may harm your production as a lot of paper work is required for back office which is time consuming.

So, going for back office support outsourcing is a good business deal. It takes care of your non core activities like payroll, human resources, data entry etc. It offers your services which meet the international standards at low cost & at the same time best quality. You can further increase the quality of services received by keeping an eye on these business process outsourcing vendors. In back office outsourcing the employees gives their 100% to achieve the targets of best services with improved quality & that too at lower salaries.

Back office outsourcing may include services like simple query solutions, managing orders or providing technical support. Though, there are many advantages of outsourcing but there are certain issues which a company must consider before that. Get a detailed enquiry of the company which you are choosing for outsourcing-its status, annual revenue, projects completed & clients .Consider the security measures to protect your data.

We may conclude that doing back office work in-house will lead to the reduction of profits. So, outsourcing is a better idea for high production & result oriented profits.

Domestic Work or Offshore Outsourcing

Best quality & time management are the two hot topics in the market. The companies are rarely interested in spending time on non core activities. A huge sum of money has to be invested for domestic work.

People believe that software development is easy. One can easily gain the understanding of the problem that needs to be addressed by talking with the people familiar with that technology & then design a solution to meet those needs & deploy it in the customer’s environment. But along with that there are certain issues related to the software development that the companies have to resolve.

Company must meet the following needs if it is not interested in outsourcing:

1. Search for qualified talent

2. Conduct training programmers for the employees.

3. Pay employee salaries & incentives.

4. Provide the employee with best infrastructure.

5. Conduct regular meetings

6. Provide them holidays.

All the factors mentioned above require a lot of money & wastage of time. To make sure that the company gets the right talent, it has to form a recruitment team for selecting employees. As a result of which many experienced people have to leave the work which may result in poor production. So many companies in US & UK today go for outsourcing.

Companies opting for outsourcing have to pay 15 times less salaries to the employees in India as compared to American employees which are a sure benefit & at the same time they get the best quality product. Outsourcing to India provides companies with a pool of talent which are already trained as various colleges are conducting campus connect programmers to train the students with the latest techniques.

For companies abroad outsourcing is better idea, they don’t have to waste their human resources; the only things they are concerned with is search the best-quality service provider & pay him for his work. Thus, the tension & wastage of resources is reduced for them & they concentrate only on core activities. Outsourcing has proved boon for these companies.

Need of Offshore Outsourcing

Offshore outsourcing continues to gain momentum in India. Though there are certain issues like security threats related to outsourcing, still companies are doing this business because they are impressed by the quality of work, results & offshore outsourcing initiatives taken by these countries. There are many reasons why companies continue to outsource. Some of them can be:

1. Capacity: Outsourcing priories an external source of capacity. Outsourcing proves to be a feasible solution when there is increase of work load & temporary sources of capacity are not sufficient. Offshore Outsourcing to India is preferable because it overcomes this shortcoming by the availability of highly talented professionals.

2. Know-how: Outsourcing may be necessary when the organization does not possess the technological know-how & a substantial investment is required to develop knowledge. IT government policies are very flexible in this regard which contributes a lot in outsourcing to India.

3. Cost & volume: When the cost of in house manufacturing is too high, or the volume of demand for a given part or service is too low to justify the initial investment in facilities, machines & training of the workforce, outsourcing is considered as a way to improve cost based competition. India, China, Russia & Philippines provide lower cost workforce for software development so companies find them as better place to outsource.

4. Demand Pattern: Companies go for outsourcing when the demand for the service is widely fluctuating or seasonal, in house manufacturing may not be justified especially if it requires investment in special equipment & facilities that might be idle for substantial part of the time.

5. Time Factor: One of the important reasons to outsource is time factor. Companies are not interested in spending their time in non-core activities. In such cases, outsourcing may enhance the time based competitiveness of the organization.

6. Quality: When the quality available from the software outsource vendor is better than the quality that can be obtained in house, then why do companies find any harm in software outsourcing. Recent surveys in North America have revealed the fact that quality obtain by outsourcing to India is the best till date.

7. Control: Since control is an essential tool in fighting uncertainty & poor planning, the reliability of suppliers as well as integration with the suppliers planning process are significant considerations in the make or buy decisions. Consequently, when outsourcing is used as a part of the order fulfillment process, proper supplier's management is an important task of the order of the fulfillment team.

8. Feasibility: Some companies have outsourcing as the only option. For example raw materials available only in foreign countries have to be purchased from outside sources & imported.

Seven Stages of Outsourcing Process

The first stage in outsourcing is planning initiative. As with any significant new initiative planning activities, including project management issues are important. Typically, cross functional terms are formed to study & implement outsourcing initiatives so team member & leader selection come into play. The project team assesses the risks & the resources information & management skills needed to mitigate those risks. Tem objectives deliverables & timetables should be set & management buy in must be achieved. After the planning initiatives, next step is strategic implications.

Strategic Implications: Outsourcing can be a powerful tool. To harness its power, however includes asking fundamental questions regarding outsourcing's relevance to organizations:

• Vision of future
• Current & future structures
• Current & future competencies
• Current & future costs
• Current & future performance
• Current & future competitive advantages

By exploring the answers to these questions the project team is better able to understand how outsourcing can fit within the organization's strategy.

Analyzing Cost & Performance is the next stage. The offshore outsourcing project team conducts activity-based analyses in order to understand the costs of the activities that might be outsourced & those that are staying. To this are added the cost of investment capital & the estimates costs of poor performance. Further having gathered activity based costs for existing activities the team makes reasonable projections of future costs of these activities. It estimates which costs do not disappear with outsourcing & what new costs will be incurred as a result of outsourcing.

The next stage is Selecting Providers. The project team lists the criteria for a qualified provider based on the reasons to outsource. Potential providers are identified & preliminary investigations are made to determine their qualifications & confirm their interest in transaction. Their qualifications are then compared to the criteria & a decision is made on whether they should be invited to purpose. RFPs are prepared & delivered to the targeted provider's list. Further discussions are held by senior management & finally a prime candidate is selected & negotiations can be planned.

The negotiations begin with a term sheet, which is used to convert the RFP & resulting proposal into an informal contract summary. To do this the parties negotiate the terms & reach the final agreement on the major issues. The term sheet leads to the detailed negotiations, which enables the lawyers to draft the contract document.

When the deal is done, it is time to begin the transition of resources. The human resources issues are carefully addresses & with sensitivity. The other factors of production such as equipment, facilities, software, & third parties agreement may then be transferred to the provider.

The last stage of outsourcing is relationship management. To build the relationship effectively, the relationship manager & the organization should be active in monitoring & evaluating the performance. If this doesn’t occur, the provider's performance is likely to suffer

History of Offshore Software Outsourcing

Outsourcing is a term discovered by the information systems trade press in late 1980s.It was coined to describe the growing trend of large companies transferring their information systems to providers. Offshore outsourcing & software development took a pace due to the competition among the various companies. Earlier manufacturers in automobile industry have made component parts that were unique but when they became commodities the manufacturing units started outsourcing components to the offshore outsourcing services providers. In recent years, companies have been actively outsourcing information systems & technology, telecommunications, Management services & more. The list goes on. But it has proved more beneficial for IT & ITES sectors.

Outsourcing is the act of transferring some of the organization's recurring internal activities & decision rights to outside providers, as set forth in contract. As a matter of practice, not only are the activities transferred but the factors of production & decision rights often are too.

Outsourcing has proved beneficial for both the service providers& buyers as it is a way for an organization to increase its effective capacity without investing capital in facilities, machines & training. It may also be thought of a way to enhance the organization’s competitive edge in the areas of cost, time, quality & flexibility by selecting the best sources & by developing long lasting relationship with selected suppliers.

India has become the largest destination for offshore outsourcing. This is due to the reason that India has well talented professionals who are also ready to work at low prices. All the BPOs, KPOs are doing exceptionally well in this. The reason behind this is the active actions taken by the legislature upon the breach of policies. Indian law of court provides the foreign country with an advantage of choosing the law of court. India is going to make a remarkable mark in the history if continues to work with the same pace in IT, finance, accounting & other sectors.