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Software outsourcing is a job contract awarded by a contracting party from a country to a company having a team of human resource with a definite skill set sitting in another country. On completion of the proposed job the software is shipped to the clients organization.
The need to rapidly complete large development projects has cause many organizations in recent years to consider outsourcing work rather than perform development in-house. A major reason for doing this is the reduction in costs that can be achieved, compared to those incurred if the work is executed in their own IT department. Development time can also be shortened, especially if the company does not already have the skills required to undertake the project. Thus offshore software development has seen tremendous growth in the last few years. Offshore outsourcing provides the ability to hold skilled overseas staff at a small part of the human resource cost which is elating to several entrepreneurs.
So the key to success of a offshore software project is the smooth flow of communication between the offshore vendor and the onshore client. Continuous constructive dialogue between the two sides is not limited to verbal communication, but is aggressively pursued in writing, meetings and conferences. So local presence of the offshore vendor can be a huge advantage for the client though it might cost the client more.
The client should be very careful about the project budget. Proper budget forecast includes vendor rates, risk involvement, scope of change in the project specification and vendor resource matrix. The financial terms should also be decided and agreed upon beforehand. Both the parties should maintain adequate transparency in order to achieve successful completion of the work.
Further, offshore development requires a methodology quite different from local development. For example, an onsite development team can resolve critical issues by meeting in a conference room. When teams are diverse, you have to create a process that automatically keeps everyone in the loop.
So many companies are gradually setting up their own offshore development centers. Though it is not always a feasible solution to small or medium enterprises. They can consider the option is of taking a stake (in the form of equity partnership or acquisition or merger) in an existing offshore company with an impressive employee retention rate and a stellar track record, ensuring quality management and a loyal workforce.
Provided you adhere to process and ensure accurate and prompt completion of projects, there is a significant savings from moving work offshore. The hardest part to quantify is the ability to get something done quickly and getting it to market ahead of your competition. For others with the time to learn the culture and establish relationships, the need to have at their bidding a full-fledged offshore team, and the money to invest, starting their own offshore center makes sense.
The need to rapidly complete large development projects has cause many organizations in recent years to consider outsourcing work rather than perform development in-house. A major reason for doing this is the reduction in costs that can be achieved, compared to those incurred if the work is executed in their own IT department. Development time can also be shortened, especially if the company does not already have the skills required to undertake the project. Thus offshore software development has seen tremendous growth in the last few years. Offshore outsourcing provides the ability to hold skilled overseas staff at a small part of the human resource cost which is elating to several entrepreneurs.
So the key to success of a offshore software project is the smooth flow of communication between the offshore vendor and the onshore client. Continuous constructive dialogue between the two sides is not limited to verbal communication, but is aggressively pursued in writing, meetings and conferences. So local presence of the offshore vendor can be a huge advantage for the client though it might cost the client more.
The client should be very careful about the project budget. Proper budget forecast includes vendor rates, risk involvement, scope of change in the project specification and vendor resource matrix. The financial terms should also be decided and agreed upon beforehand. Both the parties should maintain adequate transparency in order to achieve successful completion of the work.
Further, offshore development requires a methodology quite different from local development. For example, an onsite development team can resolve critical issues by meeting in a conference room. When teams are diverse, you have to create a process that automatically keeps everyone in the loop.
So many companies are gradually setting up their own offshore development centers. Though it is not always a feasible solution to small or medium enterprises. They can consider the option is of taking a stake (in the form of equity partnership or acquisition or merger) in an existing offshore company with an impressive employee retention rate and a stellar track record, ensuring quality management and a loyal workforce.
Provided you adhere to process and ensure accurate and prompt completion of projects, there is a significant savings from moving work offshore. The hardest part to quantify is the ability to get something done quickly and getting it to market ahead of your competition. For others with the time to learn the culture and establish relationships, the need to have at their bidding a full-fledged offshore team, and the money to invest, starting their own offshore center makes sense.
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