Software outsourcing and offshore software development

Software outsourcing and offshore software development is the trend and current flavor of busines. But there are very few trends in information technology which are as controversial as Software outsourcing and offshore software development. Although there is a business risk associated with outsourcing, many businesses are turning up to offshore low cost software outsourcing service providers to increase their profit margin and it has become accepted trend in today's business. Many corporations are very desperate to cut the cost and increase the profit. They try to cut their information technology expenditure any way without understanding how offshore outsourcing works and what to outsource and what not. There is no doubt about how software outsourcing can increase the bottom profit, but many companies are getting hurt by hastily following the boom of offshore software outsourcing bandwagon. Because they need to evaluate the big number of outsourcing vendors. According to Gartner, currently one out of every four outsourcing deal is failing. Many research reports mention that, half of the outsourcing agreements to date are terminated or changed because; they failed to meet the original objective of the business. So every company should get involved in outsourcing after evaluating their requirements and outsourcing vendor carefully. As software outsourcing is increasing, salaries of software developers are also increasing. That is making many companies to find more alternative destinations. But alternative destinations are not enough matured to provide proper outsourcing services.

TatvaSoft - software outsourcing and offshore software development company providing offshore outsourcing services from India.

Outsourcing meet

Widely known as SISI, Small industries service institute is going to organize Outsourcing 2005. It is a national exhibition along with a meet for buyers and sellers specially for small and medium level enterprises and software outsourcing companies. SISI is organizing this event at Chennai trade center on 28th and 29th of October. Director of SISI, Mr. G.M. Ambhore mentioned that main objective of this meet is to provide opportunities to small scale companies and bring them along with large companies, government departments and PSUs on single platform. He also mentioned that, outsourcing is the current flavor of time and this meet will serve as a match point for companies to find partners for growth. Mr. Mahabir Prasad, Union Minister for Small scale industries will inaugurate this meet. This meet is expected to be as successful as of 2003. Approximately 162 companies will participate in this expo including many in the business of offshore software development.

Offshore Software Development Model

Software quality guru Mr. Humphrey is the fellow of software engineering institute at Carnegie Mellon University. He is also propounder of Computer maturity model widely known as CMM levels. He mentioned that, PSP and TSP benefits software professionals a lot. PSP means Personal software process and TSP means Team software process. There is a very high competition in software outsourcing and offshore software development companies, these both models can help companies to achieve higher quality levels. They help to make software with zero defect delivery system and also help corporate to be more competitive. PSP is an individual level model which help software professional to plan his work, estimate the size and efforts required and schedule the work. It helps to reduce errors sharply and defect rate goes down to less then 1 in 10,000 lines of code. Also, overall productivity increases a lot. On the other hand, TSP helps team members to be self directed, think and achieve team goals and provide framework to support team members. This has dramatic results of executing project with very low defects and high productivity.

Software Outsourcing

Indian government is trying to help software outsourcing and offshore software development in all possible ways. National Association of Software and services companies which is also known as Nasscom has decided to create a new image for Indian software outsourcing companies in world market. Nasscom is marketing India as 'Trusted Sourcing' destination. General impression of Indian software development service in US and Europe is 'low cost service'. Nasscom is trying to create an image of secured and trusted sourcing destination. Apart from marketing and PR relations, they are also trying to implement global practices and standards of securities in the members. Nasscom has also contacted E&Y to create security standard and framework which will be implemented by its members. Nasscom will also create a board which will guide Indian software outsourcing and offshore software development companies as well as BPO companies on security issues. Members of the board will be picked up from important sectors like government, academic and technology companies. This initiative by Nasscom will also include series of events in India and other countries to educate in security related issues. Basic idea of this exercise is to spread awareness among the service providers and user organizations.

Software outsourcing benefits will reduce

Software outsourcing is mainly done for the reason of cost saving provided by offshore outsourcing. But according to some researches, by 2008, cost saving will be very less for well paid software engineering jobs in US and in India. Because, in US, salary increase are minimal against very high salary increase in India. Currently whatever software outsourcing work is coming to India, it belongs to low paying IT jobs in US. They are like computer support or computer operators or software coding. On the other hand jobs like system analysis and design, research and development are continuing to see higher growth in the region of 4 to 5 percentage per year in US. These jobs involve very high knowledge of internal IT system and business process because of which they are difficult to outsource.

Software engineers for systems and applications are also expected to be in high demand and jobs will increase around 6%. Because, inspite of software outsourcing to India, china or Russia, companies will still require in-house customization of software they have purchased. There is also high demand of research scientists and managers. So according to the report of Forrester Research, by 2008, offshore outsourcing advantages will decrease. Cost saving will also decrease as salary rise in US will be minimal against higher rates of offshore software outsourcing developers who will be in high demand. So even if salary difference and cost saving will be there, risk of offshore outsourcing and advantage of in-house development will persuade many companies to take benefit of US workers.