Tuesday, October 31, 2006

Software outsourcing and product development

Indian Software Outsourcing companies are providing offshore software development since over a decade. That has matured Offshore Software Development process and now, with the rise of rupee against dollar, cost advantage is getting lesser. To counter this, Indian companies are required to offer business process consulting and product development services rather then just providing coding services offshore. Many Indian companies like i-Flex are trying to get a market in product development and move up in the value chain.

With Indian companies trying to move up towards niche market, outsourcing product development is emerging as the very attractive market for them. Software outsourcing for product development is the latest trend catching up and many established as well as startup companies are going for offshore outsourcing for their product development. Startup funded by venture capitalists asks for Indian outsourcing first. Many VCs are funding entrepreneurs who have good knowledge of their domain and who partner with Indian software outsourcing company to provide low cost high quality solution.

Startups who want to do product development come with just requirements and vision. This becomes a very challenging task to create a successful product from it. And Indian companies are getting substantial experience with offshore product development. Europe has especially not enough skills for the product development. Many European companies are increasing their product development to India. India has a wide talent pool.

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Monday, October 30, 2006

Testing software influencing software outsourcing

There is a huge demand in Software Outsourcing projects. The better the software projects are taken care by the Informational Technology Outsourcing, there is a rapid growth seen in offshore outsourcing project. The projects we receive may seem to be done but it is not so! The software needs to be tested and ensured that the functions are proper and stable to rely. The project's manager's frustration heightens when the project goes on and on from days to weeks to months, alas! Sometime manifest into years.

The software project’s functionality is not complete, clear, documented and subjected until a formal process is undertaken by the testers in software outsourcing company. Testing requirements in software IT sectors vary considerably based on the target market of implementation technologies or developing practices. Each project is unique. The process entirely deals with evaluating the requirements of each new project, to solve the needs and providing the right team and resources to implement the solution.

Software Outsourcing
Testing is essential to develop quality software and to even ensure that the business run smoothly. Businesses and people connected with the same firm are in risk when the company fails to use adequate testing software and in the performance issues or even to determine whether the software meets business needs or not. An important thing when we come out of the system in order to ensure the reliability of the software is to check with the quality assurance; popularly known as QA.

The quality assurance people tend to be the ‘guards’ on an outsourcing project, making sure things are tested and everything is at excellence quality. If they want to play such a kind of role on a software project they would need the quality assurance track, there are courses on configuration management, strategic test analysis and advanced test automation, manual testing, testing technology and so on. These specializations were developed in response to the outsourcing industry demand wherein a volume of people were looking for more focused quality assurance and testing training. There is also a need in software outsourcing industry to update the quality assurance and testing standards and this is the way to produce people who are able to fulfill these new roles.

The Software Outsourcing will also be benefited by using testing as copious people are now more focus on the project management and development side. The QA labs developing worldwide are designed to be highly practical, and relevant to someone already working in the Software Outsourcing industry thus bringing revolutionary change in the outsourcing too. The continuous hiring of the QA specialists by outsourcing software companies who are from other sectors of developing now migrating into the testing software. So it is definitely not seen as a core discipline.

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Thursday, October 26, 2006

Offshore Software Development life Cycle

Offshore Software Development services in every Company are aimed at providing complete support to Software solutions throughout their life. Increasingly, Software Companies must look to move some portion of their operations offshore in order to stay competitive. With a clear focus on high quality, timely delivery and cost effective software development, organizations have made Offshore Software Development work as a key project management tool.

Software Development Life Cycle Management is an automated process, improvising project management and, what is most important, improves visibility of the project to the clients. The fact is that when an offshore client places a product life cycle project, the client runs greater risks than in the cases when a separate operation within a project is outsourced. Outsourcing, a complete life cycle gives the customer much less control over the project.

Life Cycle begins with the clients’ Offshore Software Development requirement analysis followed by planning, development, testing. That is the ideal choice for efficient implementation of the projects.

Analysis of Customer Requirement
Experts quickly grasp and analyze the vision of what they are looking for, as the initial stage of the long process, the customer requirement analysis is aimed to define the required functionality, environment and interface of the future product as well as to create its detailed functional specifications.

Planning of Project
Offshore Software Development can at times be intrinsically complex and risky and always requires careful planning. Proper planning guarantees that the project will not deviate from the targeted goal and increases its visibility to the client and management. Planning is an opportunity to re-assess all risks, establish priorities, select the best technical solutions, finalize schedules and resources and meet the deadlines.

Software Development
Highly skilled and talented workforce, as well as the world-class infrastructure and state-of-the-art tools and technologies make them first choice for both custom Software Application Development and Product Reengineering and Customization Services.
The time today is for global competition and product life cycle acceleration, when once considered innovative and ground-breaking is now out-of-date and ineffective. Logically planned Software Development process is a future oriented combining expert team with research and development activities with cutting edge technologies to create brand new products and product categories. They know how to make their ideas successful and market-winning with less time, less risk and less cost.

Delivery
When it matters to delivery after Offshore Software Development by time, it should follow a strong and healthy delivery management plan, and provide the customer with all the technical documentation together with tools, guidelines and past learning’s. Furthermore, weekly reports and conference calls with the client accompany the product delivery and guarantee mission-critical quality of service. All these procedures serve important purposes - minimizing the inherent migration risks.

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Thursday, October 19, 2006

Offshore Software Development Battlefield

In early years of this decade, companies had started realizing the benefits of outsourcing the activities to the experts that provides them competitive advantage. With more and more companies outsourcing their software activities, the global market for offshore IT services and business processes has nearly tripled since 2001. In bid to take advantage of this fact, players are now diving in this industry.
Offshore software development has now become the battlefield with cutthroat competition. The existing players are making it difficult for new players to enter in custom software development market and new players, like new IT ventures and contries, are trying hard to get themselves identified as software service providers. In attempt to increase the market share, companies are shifting their focus towards local opportunities. To sustain current growth, the seasoned players are sorting out the options in new upcoming technologies like mobile.
As far as the two major software development countries in outsourcing, India and China, has the most of the global IT market share and cover the larger pie of offshore software development market. Both these countries have thousands of IT companies that are offering many different types of development and other IT services. In both these countries the growth of Information Technology industry is remarkable. And both countries are competing closely with each other.
The software development market is becoming exceptionally competitive. Even though, India and China are considered as the competitive software service providers considering the quality of the service they provide, the new countries like Philippines, Russia and Nigeria are also preparing to make a dent in this market. The countries are making deliberate efforts to gain edge over English as deliverable.
The current market can not be dictated by lower prices alone but quality and service is forming the core in software development. The winner of the deal is now decided on the total offerings- cost, quality and service. To address the quality related issues more and more companies are turning towards ISO and CMMI to get certified themselves as quality providers.
The profit margin and profit earnings have made this market lucrative to enter and hence very competitive. Survey suggests that around 30% of the software companies do cover their investment and start earning profits within two years from commencement. Moreover, 40% to 45% of the companies are gaining higher than their investment withing short period. Still their are number of companies who have failed due to lower quality development services. Despite of this the market is moving upward with India becoming the hotspot for software development services.
Increased competition worldwide for IT services has made it tough for the companies to sustain their position and creating an entry barrier for the new entrants in offshore software development market.
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Wednesday, October 18, 2006

5 simple rules for successful software technology outsourcing

If you are a small software company, successful outsourcing is crucial to your development. For all the complexity this notion has, success in outsourcing is quite easily achievable as long as it is viewed as a core process in an organization.

The current economic climate, opportunities and round the clock service necessity requires most companies to outsource many technology projects to countries like India, China and eastern European countries. If you are a small Software Company, successful outsourcing is crucial to your development. For all the complexity this notion has, success in outsourcing is quite easily achievable as long as it is viewed as a core process in an organization. The list below features a simple set of rules for achieving effective outsourcing.

1. Selecting a partner
Outsourcing service companies vary dramatically in size, infrastructure, capital, language, and talent. Even large well managed companies choose the outsourcing partner based on only one or two factors and face failure. While factors like size and name recognition are important, the winning partner will have the right combination of the factors that suits you and your project needs. Infrastructure, language and talent are much more important factors than size and capital, if you are a software startup or a small Software Company. I have seen several software projects fail because the partner does not have the right communication infrastructure, like high speed connectivity or easy land line access. Reworks tend to be common place in a project if your partner does not understand phone conversations or email conversations well. Lastly, there is no substitute for talent. Interview every member of the project team and identify the strengths and weaknesses and select based on the project requirement. I have found that many projects suffer due to a lack of depth in a technology. For example, while many programmers may be familiar with Java or .Net, your project might need a specialized understanding of that technology. Don’t compromise on talent.

2. Identifying the right project
This becomes critical especially if it is first project to be outsourced. Matching the project with the right talent in team members is central to the success of the project. It is best to start simple, baby steps. A lot of companies have found success by starting with QA, internal technical support and documentation projects. This provides you with a viable back-up plan should you encounter irreconcilable differences in your first project. All too often, companies tend to easily accept that the first project is likely to fail. Don’t. You should take extra care that this is set up to succeed. Mind you, not all projects are suited for outsourcing. Choose the ones for which face to face communication is not essential. Lastly, ensure that the project is not more than 2 or 3 months in duration.

3. Managing the project
Clich├ęd as this might be, but, plan the work and work the plan. This is the most important aspect of the project. Have extra clear steps and outline them in a written manner. Perhaps the most important factors that will help you succeed are communication and use of tools. Do not assume anything and ensure that all team members are working on a common communication platform, be it email or any other special tool. Insist on daily or weekly written progress depending upon the project duration. A little bit of patience and attention to details will go a long way in making the project successful. Lastly, fund the project well; cutting corners does not work in Silicon Valley, nor will it in Bangalore.

4. Measure the success
Identifying metrics and measuring them in outsourced projects often will determine if the project is going to succeed or fail. Get a list of simple, but comprehensive metrics. For instance, if it is a support project, measure the number of support queries, time it took to respond and whether the response was satisfactory or not. Seems simple, but most project managers take a very casual approach to this. Don’t make that mistake. Insist on the measurement. It helps make a case for the next set of projects.

5. Build on the success
Lastly, it never pays to do the outsourcing just once. It is with repeated success that you gain the needed efficiency. Remember, that is why you started outsourcing in the first place. Create a good document on what succeeded and what failed. Correct the mistakes and do it again for a different project. Adding complexity to succeeding projects will help hone the process

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Monday, October 16, 2006

12 Essential tips to finding the best outsourcing company

The very foundation of outsourcing means getting someone to handle your work, a partner in business. Ideally the Outsourcing consultant or company should have a similar vision as yours and solid work ethics.
Success in business would depend greatly on finding the right outsourcing company and for this you must:

• Determine clearly what your core business competencies are. Know your strengths and weaknesses.
• Clearly define your goals, future business plans.
• Create an outsourcing proposal that outlines your objectives as well as needs. State clearly the details of the project, expectations, timelines, as well as budgets.
• Do in depth research on Outsourcing companies to find out which ones will satisfy your needs. Alternately one can hire a consultant to carry out the search.
• Search for an organization that can source many talents. Flexibility in operations is crucial.
• Interview at least 3-4 organizations. Check out their referrals and projects completed. Be sure to meet key personnel to gauge their competencies. And check out their technological expertise.
• Do a cost effectiveness study as also how the selected company will fulfill your needs. Whether their infrastructure and training will be in synchrony with yours. Systems must be compatible. The costing should address impact of increased flexibility, difference in productive and time management, which is the time taken to reach the market and its effect on competition.
• Study thoroughly the non-financial costs as well as advantages of Outsourcing.
• Check with local chambers of commerce like the California chamber of commerce at www.calchamber.com or other associations that focus on human resource like the Sacramento Area Human Resources Association at www.sahra.org.
• Before making a final choice check whether the outsourcing company or vendor is trustworthy, find out what kind of security measures they use, check the company’s reputation in the market; determine in no uncertain terms whether they have the right qualifications.
• Seek answers to: are they an established and financially sound company; what is their customer service philosophy; what is their service record; who are their current clients; is their estimate transparent or are there any loop holes; are they limited or can they expand along with your growth; is there an implementation plan; what about disaster recovery mechanisms; can they deliver?
• Check whether communications will be smooth and trouble free and if there are any cultural differences between you and the vendor. If yes will you be able to bridge the difference.

The cornerstones of a good and ideal outsource is a company that will enhance your performance; partner you in growth by infusing talent and technology; will share your visions; and contribute positively.
Interview the companies. After you select one discuss in detail the contractual terms. Be sure to protect your own interests well. It takes trust, collaboration, communication, and chemistry to make an outsourcing successful.

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Friday, October 13, 2006

Best Practices in Offshore Software Development

A Software Model that emphasizes on global delivery of quality software build by talented pool of professionals at an economical cost from a development center that is located in a foreign land is Offshore Software Development.
The burgeoning competition to be branded as the Quality Offshore Software Development Company has signaled the requirement to implement the best of the resources and innovative strategies. After a jerk of the start-up phase, HyTech Professionals has implemented the approach that encompasses the minutest details, which had been or may have been easily overlooked by the nascent businesses to win the client interest. Clearly, the enticing feature of Outsourcing is cost savings without compromising on quality. To achieve this objective, the initiative should begin with the Best possible approach by the offshore client and the Software vendor.
Huge cost savings, time optimization and talented technocrats in a minimal risk environment are often accompanied by some challenges such as communication gaps, decreased visibility to project status, unexpected spikes in budget allocation and cultural hindrances.
The opening channel to venture in Software Offshore Development is the Smooth flow of communication between the offshore client and the vendor. A constructive dialogue between the two sides is not limited to verbal communication, but is aggressively pursued in writing, meetings and conferences.
Seamless communication can be reinforced by working on a global clock, which is accomplished by implementing work-schedules with a time overlap between the software offshore client and the vendor. Though, it may be expected that the offshore vendor works in accordance with the client suitability. Local presence of the offshore vendor can be of an added privilege to the client, as it guarantees direct and constant interfacing. The flexibility and ease to approach the offshore vendor strengthens the client confidence.
Another factor that should be taken care of is the Budget forecast for the project. The Technical and Business Analysts should take into consideration the following:
• The vendor Rates: what is more suitable to the project requirement. Should the accepted rates be “Per Project”, “per Hour”, “per Month” etc?
• The Risks involved in accomplishing the task
• Is the quality being compromised for an attractive price?
• See through any hidden costs. For example: Change or modification in the Client specification, Re-doing of any deliverable.
• The Offshore Vendor Resource matrix that cover the attributes required by the Client
Once the offshore client is confident that the terms of engagement are clear, both the Teams coordinate the efforts and work on the project. The Engagement Model may be transparent to win the client interest and hence the one that adds value to the relationship.
To foster the nascent relation between the offshore client and the software vendor, it is imperative that the offshore vendor architects the design such that which ensures an uninterrupted work-flow. Implementing a development environment that is a replication of the offshore client environment serves as a conduit to smooth accomplishment of tasks.
Apart from setting up an extension of the Client backdrop, the teams engaged from either side should delegate their tasks through a single point of contact to eliminate any ambiguities that could arise due to multiple interfacing channels. All the tasks relayed between the Offshore and the Domestic teams should be anchored on close communication and active follow up.
How much ever one decides to implement an error-free design, some issues or unpredictable lags can reap up and slow down the work-process. Such issues if handled with a mutual consensus and cooperation from both the parties can ramp up the process to successfully achieve the target.
In conclusion, a summary of the steps for the best practice in Offshore Software Development are:
1. Implement a Transparent Model that is customer-centric
2. Conduct a proper survey to shortlist the best suitable vendor for the project
3. Finalize the contract that explicitly defines the Financial terms and states Service Level Agreement
4. Fragment the Software Lifecycle in phases- from Inception to Delivery
5. Develop and deploy the accomplished tasks in a close collaboration with the Offshore Client.

For details read here

Thursday, October 12, 2006

Software Development India has other name as hiring business

Very few people know that Software Development India has other name as “hiring business”.

But the company now plans to retain its employees so that the work does not stop. I don’t mean in the literal term ‘stop’; but software companies have their own deadlines to meet and the project being done should be met before the end of the time. For client in overseas; he repeatedly shows annoyance if the work is delayed or postponed, because according to him Time is Money. So indeed the Offshore Outsourcing Company set up in India indeed buckle-up its speed in sense of money and image protection of the firm.


Software Development
in India usually hire as many employees as 100(medium sized companies) and in order to retain their employees they come up with the idea of bonus which is given in form slips so that they get committed out of that old employees and need not spend time in training and exposing the new employees. This is indeed the finest idea in a Software Outsourcing Company. The employees have positive motivation to work and prove their abilities in much larger scale. The senior posts help the employees to have better job opportunities for future prospects.


Software Development India plans for retention awards. The retention of employees has gone to such an extent that IT Companies now plan to organize and manage the work force properly. Higher wages paid to employees, some extra perks and some other beneficial such as medical insurance claim or any other form insurance policies from the company helps the retention of employees within the India Software. This report is according to the HR experts who share their knowledge through many groups in Yahoo and Google.

Such compensations help the employees to stick to their own company and are less attracted to the other technology industries. Still there is a allegory which goes this way- “though he may advance as much as he wants, man cannot two things at the same time. He cannot sneeze with his eyes open!”. This allegory suits the savvy world that how much ever the Software Company tries to retain its old employees, the company will never be able to achieve to the fullest. There could be some employees; who may experience insecurity being in the same company for a long time.

You might be wondering which kind of insecurity can prevail among employees in the Software Development India? You need to understand that each software company or Software Outsourcing Company is different from the other one. Each company focus on one or other technology in accordance to the clients need of interest. But there could be some employees who want to have varied exposure to all or some field of technologies. In such a case, one out of every employee leaves the company in search of advancement.

Software Development Company will never be able to retain all the employees. However they change strategies of their office norms and culture, the employees’ experiences hostility or fatigue or boredom in the company. The India Software Company indeed offers retention bonus and some company even calls for bonds and agreement of working as minimum as one year, but these acquisitions do not show much change in the retaining of the employees.

Retaining employees helps the Software Development India to protect its image in the Software Market. The firms that partner with Outsourcing Companies make sure that the company and its employees are in stable and the staff is not harassed or even pressured. Any kind of dysfunction may lead to personnel problems and hence the work produced is not effective. Therefore the firm continuously plans for success as not in profit matters but also increasing employee ratio.

Wednesday, October 11, 2006

Software Outsourcing India - Replicating the magic

In Offshore Software Outsourcing India is the world’s favorite destination:
India's share of the global offshore Software outsourcing market for software and back-office services is nearly about 44%. It’s premier trade body of the IT software and services industry, technology and IT services exports in India were worth more than $17bn in the year ended March 2005, a rise of nearly 35% over the previous year. A further expansion of 30% in exports is being predicted in the next twelve months, to cross $22bn.The world is going to discover, the fact that India is a super power when it comes to developing Software Solutions. Swept by the current trend "Software Outsourcing India", we find that many fortune companies are beneficiaries.
Factors fanning the potentials: Opportunities for India in Offshore Outsourcing:
Human resources and training:

Software outsourcing India being the world’s second highly populated country is a boon by itself. India is proud of the abundance and easy availability of its highly qualified and familiar with English speaking with minimum education as bachelors and masters. The IT professionals are skilled and highly qualified in respective streams are focus and keen on providing performance is a key to success in the field of Software Outsourcing

Development India
Cost efficiency of Software Outsourcing in India:
Cost savings can be achieving by IT outsourcing to India, owing to the wide gape between the personal costs in India and that of the developed countries. Offshore Software Outsourcing to India offers considerable economical benefits for those who are prepared to exploit the advantages of Outsourcing.Remote Infrastructure Management Services:India can offer management services for IT infrastructure, applications operations, IT security and maintenance. This sector presents great potential through large-value multi-year contracts

Government Promoting the IT growth:
The government of India is stable for IT, whose policies, economy, GDP growth, taxation, power, telecom, industrial parks & special zones have been helpful in improving the infrastructure as well as communication in Offshore Software Outsourcing Development. The government proves to be a great support for software firms by further providing all the basic facilities required for an outsourcing company to flourish thus playing a major role in contributing to the success and well-being of IT outsourcing to India.

Reliable communication facilities:
Excellent telecom, ISP, and cellular networks are available in all cities & towns in the country. India prides in the reliable satellite and submarine communication links that facilitate good band connectivity with the rest of the world. Thus companies engaged in Software Outsourcing to India, can be in touch with the vendors without any connection hurdles. This plays a significant role in determining the success of Offshore Software Outsourcing to India.

Offshore Outsourcing
Offshore Outsourcing opportunities for India also exists in other fields too Medical Writing, Financial Research, Content Development, Animation, Film, Publishing, Web services, Human Resource, Outsourcing in Recruitment, Training, Education, Nanotechnology and many others. Amongst all these, Offshore Software Outsourcing is an important mainstream business tool to achieve revenue growth, address competitive threats and improve overall performance.

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Tuesday, October 10, 2006

Research on Offshore Software Outsourcing

There are number of graduate students in business & economic classes from main colleges and universities, those students are doing research work on offshore software outsourcing, interestingly very nice thing for studying. Offshore Software Outsourcing is not a bad thing as many countries believe. That means efficiency with economical factor is really coming closer and closer in this world. There is one interesting real story, that is Sara Lee has sold all its companies and then contracted others service manufacturer and vendors for making same product.

If some one look to companies likes of HP and their products in international market, it could see the same thing with Offshore Software Outsourcing. Now days, Boeing has also did same thing. One could review the work of offshore outsourcing and the services to other places. In that case of buying your aircraft over another company does not provide jobs by means of Offshore Outsourcing work nor have factories in that country one see?

Many people likes of union workers and employees are complaining about these simple needs, yet do not see the international sales advantage or the fact for making these products at competitive rates that gives the company some benefits. As an efficient organization things could be made closer to raw materials and one can save supply chain transportation.

If the company such as Boeing could make Offshore Outsourcing to other organization from other nation with cheaper overhead cost, nation that may buy these aircraft and nation with great natural resources building those parts; in that condition everyone wins and the economies of scale are fully realized. Well Boeing is able to sell more aircraft as compare to Airbus, if they didn’t have Offshore Outsourcing, the costs of aircraft go up, they sold less number of aircraft and eventually that will fall for the competition.

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Monday, October 09, 2006

Predictions of valuable software outsourcing India

According to a report India's Information Technology Outsourcing and Business Process Outsourcing (BPO) services industry could be bringing in US$60 billion by the year 2010, growing at over 25% a year. In product of Software outsourcing development, companies have started to establish niche.

Overall prediction in Information Technology Outsourcing market out of India will grow to $8 billion by the year 2008. Today, India’s reputation to do product development and move up the value chain is getting established. True strength of India is the fact that it has a strong and growing pool of young high-end technical talent. Several large companies setting up their Development centers in India have proved this. It will provide India a long-term play in this space. Software product Outsourcing (SPO) is emerging rapidly and is likely to be among the fastest growing segments of Information Technology Outsourcing to India in the next few years.

According to a report published by, Research and Development (R&D) Outsourcing market for Information Technology in India will be estimating to grow by $9.1 billion by 2010 from $1.3 billion in 2003, at a compounded annual growth rate of 32.05 percent.

Business Process Outsourcing Industry is currently seeing a boom in our country. While it is creating some perceptions that India is a low cost- low value destination, we see the BPO boom as a means to create an ‘India’ brand in the western markets. If we can able to build on this and change perceptions by delivering high quality which we are doing, this exposure can be used to engage with the same customer for high-end work.

Software Outsourcing
Software Outsourcing India and services exports were less than $18 billion in the fiscal year ended March 31 2005, which rouse by nearly 35 percent from the previous year, the total addressable market for global Offshoring is near by US $300 billion, of which US $112 billion will be Offshored by 2010. By 2010 the Indian Information Technology Outsourcing and Business Process Outsourcing services industry could directly employ 2.25 million people, besides providing indirect employment to more than 6.25 million workers.

A large number of multinational technology and user companies are stepping up Outsourcing to India. Microsoft Corp. announced last week that it would increase its staff in India from 4,000 to nearly 7,000 workers over the next three to four years.

Software Outsourcing development
is big business, generating global revenues more than $298 billion in 2003. Outsourcers reap gross margins of 25% to 50% on projects sent overseas. A contractor typically pays between $11.75 and $16.50 per hour, including benefits, to a computer programmer in Mumbai, India, and charges its American client between $18 and $25 hourly for that worker. Software Product Development in IT is a rapidly growing market that is turning India into a destination to Offshore Outsource high end applications is clearly visible with the space and time keeping into account.

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Saturday, October 07, 2006

Software Outsourcing Development on knife-edge

In the global Software Outsourcing front India is currently a leader as the success has raised costs all around. Companies which are doing strategic planning for the next 20 years are all looking at option other than India," says managing partner of a firm specializing in consulting on Software Outsourcing Development.
Several countries are preparing road maps to attract global companies in the Business Process Outsourcing space. However, India still does not have a strategy at the macro level to develop the industry in the long run. The positioning of a country is now becoming important in the global Offshore Software Outsourcing space. India got positioned by default and not by any great government design, as a place with an endless proportion of educated and English speaking workers.

Software Outsourcing Development has witnessed a transition from being, traditionally, an in-house process to a global collaborative effort. This really comes as no surprise, with what the increasing need to focus on standards, maximize resources, and ultimately optimize core Business Processes. In addition are the constant imperatives to reduce risks, and combat mounting cost-pressures as well as numerous difficulties associated with securing the appropriate skill sets.

Software Outsourcing Development
Companies are constantly leveraging Information Technology to gain competitive advantage. Though, this is becoming increasingly challenging with over-stretched IT budgets. Some have countered this problem by boldly moving into new paradigms of distributed development—which typically involves spreading Software Outsourcing Development across different offices, time zones and even companies.
Venture capitalists funding small and mid-sized Software product companies in the US are insisting on an offshore strategy to keep product development costs low. This helps the independent Software Outsourcing vendor’s management focus on marketing and customer management more than project management and resource management. For starters, product companies work on the cutting edge of Information Technology Outsourcing.

Success of the Offshore Software Outsourcing industry in Bangalore and Gurgaon can already be seen. But the infrastructure in these cities is cracking under the pressure of growth of the Business Process Outsourcing industry. Moreover, there are limits to the natural advantages that India has, and companies and industry observers feel that unless a push is given India may lose its edge.
Most of them want to replicate this success in some form or the other. But it is difficult to beat up this heat prevailing all across the nation. It is at rocket speed for greater success globally. Governments across the world are envious of India's success in the Offshore Software Outsourcing space.

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Friday, October 06, 2006

Software Outsourcing - Early Successes

Initially when we heard of software outsourcing, we thought of their fundamentals as flaw and would think of they could never yielding the customers needs, how much ever the person may try hard to provide. Effectiveness of the early dealing was difficult because of two reasons. First is they could not eliminate the waste and second one is exploited the economy of scale in mainframe operations. But those days are gone, the software outsourcing transactions have developed and become more responsible to the consumer and client’s needs.

Offshore outsourcing

Organizations, which moved towards the practicality unique product in Software Outsourcing category in the late 90s, are now reaping rich rewards. Annual revenue growth rates for most of the top 10 companies are more than 100 per cent in the range for the last two years. Never the less comprising Rs 2,000 crore out of the nearly Rs 76,000 crore expected to be earned by software exports from the nation this year, the segment has been doubling its revenues for the last three years.

The Information Technology industry is achieving phenomenal economies of scale & reduced the unit cost of hardware and software communications dramatically. Any sensible prospect for software outsourcing will get their house in order, by eliminating the waste before approaching the market, and mainframes have given way to server technology which does not lend itself in the same way to economies of scale.
The most significant thing which drives these firms is their huge potential for growth. They point out that out of the $40 billion (Rs 180,000 crore) that product companies in the US are supposed to have spent on Outsourcing Software Development this year, India has barely scratched the surface by attracting just around Rs 2,000 crore by converting it into Software Outsourcing Development.

Purely, by increasing the scales does not bring economies of scale. They rely on being able to spread costs which do not vary with volume (fixed costs) over a greater volume. Phenomenal economies of scale were achieved, through massive investments in Software Outsourcing Developments, chip plants and infrastructure spread over hundreds of millions of units and squeezing labour costs. In these cases the marginal cost of producing each additional unit is now insignificant. Economies of scale level is not possible until and unless investments are made repeatedly in technology to shift more of the variable cost into the fixed base.

Offers by outsourcing
Specialist services provided by the suppliers are now investing in technology, with the method of application-specific Software to reduce labour costs, can also deliver benefits by Software Outsourcing. The only way to alter the economy is to Outsource and cut out any of the suppliers' profit and management costs that arise purely from labor. Onshore software projects costs a lot more than Offshore Outsourcing and there is subsequent reduction in running costs can be very substantial. Further, the difference between what supplier’s staff is paid and what the user is charged for them is a great contribution to suppliers' profits.

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Thursday, October 05, 2006

Offshore Outsourcing needs a careful planning

In the wide field of Offshore Outsourcing, there are lots of issues which are to be planned very carefully for the companies looking to outsource some IT functions. It will be helpful to them in insuring that these projects will perform successfully. Offshore Outsourcing demand for IT services is rising very fast as more and more IT companies are searching for the ways to cut the IT project cost and improve productivity. Global spending on Outsourcing will also hike up by 2007. But the success story might not be the same for all outsourcing projects, and this is thankful to improper planning. Consideration of cost and complexity associated with Offshore Outsourcing is an important aspect.

There are lots of pitfalls for companies that outsource IT projects and services. Some of the reasons are…
Communication
Cost
Culture
Organizational readiness
Productivity
Company should also decide properly, that whether or not to go for Offshore Outsourcing, and if at all decides to take the advantage of outsourcing than up to what extent the project or service should be outsourced. It is also important to apply proper strategic decision for any IT company while looking for an IT project to be outsourced. Proper planning is also one of the important and must for a successful Offshore Outsourcing.

Planning of offshore outsourcing
For Offshore Outsourcing of an IT project, the process should start by analyzing the total costs of the whole project. There are lots of additional costs like, communication, training, traveling, oversight etc. apart from labor costs. And it is also true that these costs sometimes go up than the labor costs. It is also advisable that costs should be considered at the different stages of the project, as the whole cost is not going to remain the same. And it might be too early to think for the profit or the cost savings for just one or two years of outsourcing from the start of the project. One more important thing is to be realistic about the productivity levels that outsourcing service providers can offer. It might be wrong to judge that the productivity of an outsourcing partner will also match the same of that of internal IT staff. For the initial stages of the Offshore Outsourcing, be prepared for lower productivity and unexpected results. Additional costs or poor results may occur if the project is started without considering all the factors properly.

For making a successful Offshore Outsourcing deal, it is also required that your internal staff is supportive and understands the needs and reasons for outsourcing. Careful consideration of all factors and risks would help your company to lessen the challenges. Once you will get success and if everything goes well then you will be able to run in the wide sky of Offshore Outsourcing.

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Tuesday, October 03, 2006

Where are the Facts about Outsourcing?

Outsourcing of jobs to offshore companies has been a hot-button issue since the 1960s when the United States began losing automotive manufacturing jobs to Japan. In recent years, the outsourcing of technical jobs has revived the debate which became one of the top issues in the 2004 presidential campaign. However, actual facts and statistics about the effect of outsourcing on the American economy are hard to come by. Rhetoric, not facts, dominates the discussion of whether Outsourcing has an effect on the economy.

There is a serious dichotomy between the beliefs of average Americans and those of economists and other experts. For example, a Zogby International Poll showed that 71% of Americans believe that outsourcing hurts the economy but when the Wall Street Journal asked the same question of economists, only 15% felt that outsourcing had a negative effect.

Opinions on outsourcing tend to be divided by economic status rather than political persuasion. For example, some Republicans in the House and Senate believe that outsourcing has a terrible effect on the economy and that legislation should be enacted to stop it. However, conservative think tanks like the Heritage Foundation and Republicans with ties to big business believe that the threat of outsourcing has been over exaggerated.

Liberals are also divided about outsourcing. The Democratic Party has traditionally been the party of labor in the United States but it was a Democratic president, Bill Clinton, who shepherded the North American Free Trade Agreement through Congress; a treaty which most experts agree facilitated the current outsourcing trend.
For every argument for outsourcing, there is another argument against it. For example, the Heritage Foundation argues that despite outsourcing more Americans are employed than ever before and that jobs continue to be created to compensate for those lost overseas. Anti-Outsourcing advocates point out that gross wages are dropping because the jobs that are being created are low-level service sector jobs, not high-tech jobs to replace the ones that are being lost.

The Heritage Foundation, citing the Organization for International Investment also argues that for every job outsourced, another is "insourced" to the United States from another country, often at a higher rate of pay than the job lost. Anti-outsourcing advocates say that those numbers can't be accurately verified.
What is clear is that until the federal government conducts accurate research into the effects of Outsourcing on the United States economy, there will be no definitive answer one way or the other.

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Offshore Outsourcing Central

Outsourcing today has become a global phenomenon, integral to the strategy of every major organization and company. Global outsourcing enables companies to outsource tasks using the best possible resources available globally at the most cost effective prices. Even though Offshore Outsourcing is by no means a recent phenomenon, this practice has become increasingly prevalent in the IT and software industry in recent years. This has been brought about because of the advent and ubiquity of the Internet and major developments in the communication infrastructure worldwide. Almost all major global corporations and even a large number of small to medium sized industries have adopted outsourcing of IT and IT enabled services and realized the benefits in a short period of time. Offshore Outsourcing offers companies several benefits – outsourcing non-core activities enables companies to focus their resources on their core competencies and it enables them to take advantage of significant cost savings over a long term

India has been at the forefront of this revolution from the start and today enjoys the enviable reputation of being the favorite destination for Offshore Outsourcing of IT services, software development and business processes. Even though China, Philippines, Ukraine, Romania etc are emerging as alternative destinations for offshore outsourcing of IT services, India today is clearly the dominant player. Several factors contribute to India’s current position – a large pool of English speaking technical professionals; low costs associated with the technical talent in India; and a political climate which encourages stability, security and the economic growth (the right ingredients for attracting international investors and global companies). However, India is no longer simply about providing low cost software development and business process services. Even though significant cost benefits is a major factor contributing to the value proposition of Offshore Outsourcing, Indian companies have moved up the value chain to now provide services requiring a higher degree of domain expertise and knowledge capital. As an example, along with IT and IT enabled services, companies in India are now providing services in the areas of business consulting and investment research to top global consulting companies and investment banks.

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