Offshore Outsourcing

Offshore outsourcing is no more a new concept. The significant savings attached to an project outsourced to offshore software development center, convinces most of the Fortune 500 companies worldwide. On average companies report 20% to 50% in net savings by adopting the offshore outsourcing strategy for software requirements.

Lately, companies have restricted the traditional offshore outsourcing risks and shaped an intense relationship with their offshore outsourcing partner by establishing offshore software development center in the form of dedicated centers. A dedicated center can be said as an extension of an organization abroad. The offshore outsourcing partner, allotting a qualified talent pool, with required offshore technical skills set, provides the top-level decision making employees in the dedicated center. A dedicated center offers all its productivity to the host organization; in exact terms of their culture and methodologies to produce immediate results steady with the organization's Quality Assurance (QA) standards. Measurable long terms cost savings along with a desired enhancement in productivity are the major forces behind developing a dedicated center.

Offshore Outsourcing destinations in race for providing the dedicated center services are India and China. With China coming up as a major attraction for the same, there are unique and proven advantages for having offshore software development center in India. The big corporations of major industries have their presence in India and the experience with the same can pull them more towards China for the dedicated center services also. But the major and serious competition will be from China with its many unexploited areas of expertise in the Industry. 

China is one country that is emerging as a most serious competitor to India and is challenging India's lead in the Software development marketplace. Let us have a look at some of its features in IT:

• China has the numbers and the low cost structure that India enjoys. In fact cost is even lower as compared to India which has given China added advantage.
• It lacks with its rigid enforcement of Intellectual property rights and also suffers from the language barrier.
• Japan continues to use China as a staging for a big portion of its Software development, even as it has moved to engage India.
• But the Government has been taking a lot of initiatives in the recent past which has given a boost to the IT sector in China.
• Major emphasis has been given to English learning by the Government.
• Many Indian companies has also started looking towards China to start up its software development centers to take the cost advantage and mark its presence to grab the local Chinese market. 

Why Outsource - Short and Long Term Benefits

Outsourcing in today’s world is seen as a strategic management option rather than a just a way to cut costs. It helps achieve the companies their business objectives through operational excellence and an edge in the market place. Every company today, has one or more of its services outsourced so that it can focus more on its core competencies. Outsourcing’s emerging power as a business tool of unique versatility and flexibility is undoubted

Resources of the companies need to be focused on core business functions so the non-core functions need to be outsourced. Outsourcing gives you the right combination of people, processes and technology to operate effectively in the Global market place without burdening your time and budget.

Companies outsource in order to achieve the following benefits:

1. Financial Savings
2. Technical Abilities
3. Market Agility

Say for example most IT companies nowadays outsource their Human Resource procurement through placement agencies that help them to procure the right skilled people rather than the companies themselves looking in for suitable manpower in the market. These Placement Agencies who possess the core competence in the field of Human Resource Management justifies the company’s decision to go up with the Human Resource they offer vis-à-vis the work expected out of it.

The benefits gained by the client on a short-term basis would be:

• Ability to focus resources and attention on core business initiatives
• Reduction in headcount and attrition rates in the outsourced function
• Re-skilling of remaining staff with better and more marketable skills
• Refinement of project management, risk management, and service delivery skills
• Implementation of demand management and service delivery disciplines
• Optimization of systems management and support processes
• Access as needed to specialized resources.

 Typical long-term benefits include:

• Predictable results-based expense for the outsourced function over the life of an outsourcing agreement.
• Joint and proactive problem solving and innovation.
• Superior management of the business application portfolio.
• Enhanced career opportunities for client staff, based on sophisticated.

Management, contracting, and outsourcing integration skills.