Outsourcing comes with both advantages and disadvantages. Generally speaking, at a high-level Outsourcing would appear to be ideal for keeping costs down, however, companies considering outsource must keep in mind the pitfalls while evaluating the pros of outsourcing, prior to jumping onto the outsourcing bandwagon.
Software Offshore Outsourcing Benefits
- Undisputedly, the biggest advantage of outsourcing is lower costs. Lower infrastructure and overhead costs, coupled with lower pricing for skilled technical personnel, is a true competition beater.
- Results in tremendously reduced investments in technology, and salary payouts for large tech teams, and the departmental expenditure on human resource management.
- India is known the world over for high-quality software developers, and a large pool of such highly skilled talent.
- An organization can focus on their core business propositions, leaving the software support to Indian professionals.
- Software dependent business processes, resulting in higher efficiency and increased productivity and material accountability.
- Access to skilled technology professionals
- Outsourcing keeps your business running 24/7
- Flexibility in staffing needs
Offshore Outsourcing Disadvantages
- Confidentiality and risk of sharing business sensitive data.
- Issues related to the quality of deliverables, if the software outsource provider does not have processes in place to monitor quality and timelines.
- Lack of focused attention due to multiple client engagements.
- The providers lack an understanding of the client’s culture and work ethics.
Top Outsourcing Trends
- Data and Intellectual property Security and Confidentiality Prioritization.
- Cost Versus Value – service providers that bring value to business rather than just provide service offerings at lower costs.
Albeit the outsourcing advantages and disadvantages, the business-critical benefits that outsourcing brings, tend to clearly outweigh its disadvantages.
Trends in outsourcing have changed over the years, this is likely to continue with better connectivity the world over, especially in third world countries and modern technology facilitating better connectivity. Consequently, the outsourcing industry seems poised to grow significantly with more efficient management techniques. Experienced outsourcing players now tilt their focus on providing superior quality services coupled with an awesome client experience, instead of focusing on merely reducing the cost of service offerings.
Further, there is now a trend in companies now outsourcing core functions to stable and highly process oriented providers that are providing top quality and efficient services, thus adding value to the business, over and above cheaper service costs.
How to make Outsourcing work for you
1. Have a Service Level Agreement in place
2. Clearly define your goals so the provider is clear on expectations and how to best support you.
3. Prioritize your needs
4. Profile the ideal skill sets your developer would need to carry
5. Talk to the Developer who will work with you
6. Try to get the provider to run a trial pilot first before engaging in long-term commitments
7. Look for
8. Avoid Micromanaging the developers, allow for breathing space for a healthy relationship.
Why Offshore Software Development to India?
Statistics show that over 70% of businesses in the US and Europe choose India as their top-ranked outsourcing destination. NASSCOM lists close to half of Fortune 500 companies outsource to India. India continues to outpace competitor players as the preferred outsourcing destination due to various factors:
Favorable government policies
Top Quality Infrastructure
Quality Technical Education that Indians possess
Skilled Work Force that easily and quickly adapts to changing technology trends
Consequently, the Indian IT industry has realized a 20% + growth rate in outsourced services each year.