software outsourcing

A blog related to software development company and offshore software outsourcing

Tuesday, September 27, 2005

Why offshore outsourcing fails

Offshore outsourcing


Many companies are rushing in completing offshore deal which can affect quality of offshore outsourcing services. Majority of companies are running into offshore outsourcing just for cost saving. There are factors like hidden cost, poor communication, traveling cost, cultural training etc. which can offset the cost saving. Also there is some startup cost and planning cost which is not considered by the companies. In many big long term offshore outsourcing deal, actual benefits come after the initial stage gets over and steady state starts which is around 12 months of engagement. Communication gap or miscommunication between client or onsite team and offshore software development team can also affect the project development. Same way, miscommunication between management and employees can also affect. Another issue which is becoming bigger and bigger is, high turnover of offshore software development staff in India.

Offshore Outsourcing company - TatvaSoft

TatvaSoft is offshore outsourcing company providing offshore software development and outsourcing services to clients in US and Europe in different technologies.
Tuesday, September 27, 2005

Software Development India

Banglore based Infosys Technologies has announced its plan to expand software development operation in china. Infosys is a publicly listed software development company in India as well as US. It will set up software development center in Shanghai and Hangzhou after completing deal with Shanghai Zhangjiang and Administrative Commission of the High-Tech Development Industry Zone - Hangzhou. Infosys will higher 6000 engineers in next five yes which has currently 250 employees. They will also invest $65 million in the due course. These new centers will focus on software development as well as other IT services. Centers will have training facilities.

Tatvasoft - Software Development India


Tatvasoft is a leading software development company from India and preferred destination for offshore outsourcing due to low cost and quality outsourcing services.
Wednesday, September 21, 2005

Software outsourcing maturity

Software outsourcing relationship

Software outsourcing was once considered a sub-topic at an IT conference. But now it is able to have its own conference and addresses full range of business functions. It was the case at 2nd annual European outsourcing association conference in Frankfurt. It was attended by software outsourcing companies, advisers and clients, all together for full 3 days. They discussed about Outsourcing and shared services. From the conference conclusion was that, outsourcing has matured from situation where outsource delivers expertise and solutions to situation where outsourcing company gets involved in business activity of customer.
More information about software outsourcing maturity can be found here.
Tatvasoft - software outsourcing and offshore software development outsourcing company from India with expertise in different Microsoft technologies and image processing with C++ for different compression algorithms.
Monday, September 19, 2005

SOFTWARE DEVELOPMENT INDIA

Software development India

Well known IT Solutions and services company Ness Technologies is going to setup a team in Mumbai for its managed strategic services facility- software outsourcing. Ness has got a contract from Hollywood Media Corporation for software development. This project will get executed in its Mumbai facility. Ness will also support and provide software maintenance to Hollywood Media's IT and software application management and various internet adventures. Hollywood Media Corp provides news, ticketing and information related to entertainment industry.
Ness has two offshore software development centers in India. One is in Mumbai and other in Bangalore. Mumbai center supports application development and maintenance services. While, Bangalore center is software R&D lab for more than 20 software vendors.

Tatvasoft - Software development India - Providing offshore outsourcing services for software development in different technologies.
Tuesday, September 13, 2005

Software Outsourcing benefits

Recent report by LogicaCMG shown that, outsourcing a way by which UK based companies can increase their profit margins and corporate value. Report mentioned that, companies which are outsourcing are outperforming their competitors and they can create a shareholder value of around 25 billion dollars. Report also mentioned that, companies may not explain investors about the long term advantage created by outsourcing, which may result in an under representation in share valuation. This LogicaCMG study which is called Outsourcing of Corporate Value, analyzed historical stock market data of companies which have announced outsourcing deals with companies that have not announced any deal or not outsourcing.

Offshore outsourcing to India

Result analyzed relation between the announcement of an offshore outsourcing deal by company and its stock valuation after 1 month of the announcement of offshore outsourcing deal. Result shown that, companies which have done offshore outsourcing deal perform average 1.7 percent higher int he stock markets benchmark against other companies in the same sector and not doing offshore outsourcing to india. In five out of seven sectors, companies which do offshore outsourcing is outperforming their competitors.

Benefits of offshore outsourcing for investors

LogicaCMG mention that, inspite of increase in profit margin, number under estimates the opportunities offshore outsourcing provides to increase the corporate value. It mention that, shares are priced based on the expectation of free cash flow a company ahs and effect of outsourcing on free cash flow. But companies need to explain their stock holders what the are planning to achieve with outsourcing and where they will reinvest benefits of outsourcing. Another part of this report studies analysis and forecast on economic impact of corporate value. It shows that, if UK companies increased outsourcing by 52 percent by 2010, it will create $17.3 billion additional stock value. Chief executive of LogicaCMG mentioned that, outsourcing is enabling ogranizations to reap benefits in addition to cost reduction such as releasing capital and human efficiencies and using savings for reinvestment. Outsourcing is not just about reducing cost and increasing profitability but also to enable organizations to improve their utilization of investor's capital.
Tatvasoft is one of the growing offshore outsourcing company with development center in India. We are providing offshore india services in asp.net, vb.net, c#, xml and other microsoft technologies.
Wednesday, September 07, 2005

Software Outsourcing

Offshore Outsourcing

Although offshore outsourcing is increasing and more and more software outsourcing is going to India, not all entry level work is going to India. According to recent study by University of California, Berkeley , researcher mentions that, by down skilling some information technology work which combined with some training program can provide low wage worker a career ladder in IT industry. Berkeley professor Karen Chapple mentioned "Although some entry-level work is disappearing offshore, the economy still offers opportunities for job seekers with little college education to work in IT"

Which work will not go for offshore outsourcing?

Majority of comapnies are moving low level coding type of work to offshore and in some cases they are also moving higher level of research and design work too for software outsourcing to the low wage countries like India and china. US employees are advised to upgrade their technical skills to provide higher end designing work or combine business and technology skills. There is also a theory that, IT creates two poles in economy - high end knowledge workers and low skill service workers. But professor reached to the conclusion that, so called divide can be bridged, after interviewing more than 200 employees. She said, key is the entry level IT related tasks like computer support. This type of jobs require little training and college degrees compare to software development. Also, Chapple remained positive despite of software outsourcing boom that, some work will remain onshore. Also, she mentioned that, non profit job training programs are very helpful for disadvantaged people. But she was critical for some federal programs for job seekers.
TatvaSoft is a software outsourcing and offshore outsourcing company from India, Ahmadabad with clients in US, Italy, France, UK, Spain and Israel.
Tuesday, September 06, 2005

Software Outsourcing growth

According to advisory firm TPI, offshore software outsourcing is going to rise. This research has included around 100 senior UK executives who are responsible for software outsourcing within their companies. According to survey 81 percentage of the total executives mentioned they plan to increase their offshore outsourcing over next few years while only 4 percent mentioned that they will decrease it.
Although, software outsourcing is increasing, research also revealed that, large companies are choosing to offshore their IT related activities to India and china by starting their own wholly owned subsidiaries rather then external service providers. Software outsourcing has grown, developed and now matured as a trend in today's business. Managing director, International Mr. Duncan Aitchison of TPI mentioned, "Our survey results clearly indicate that there is very little disillusionment with offshore outsourcing. What we can observe, however, is a general shift towards more sophisticated sourcing strategies as the global sourcing market comes of age. The growth of captives stems from companies now being more aware of how to conduct an offshore operation and less reliant on external service providers." He also mentioned, the build, operate and transfer model is becoming the latest trend in IT industry.
Survey also reveals that, many companies are taking global view of software outsourcing and separating process to decide what is best for offshore, near shore and onshore development. As outsourcing trend is increasing, UK buyers are seeing wider range of countries for offshore software development. Although India is a clear leader and used by 75% of the respondents, there is a close competition between central and eastern European countries and china for the second spot. Although currently used less, central and eastern European countries are rated attractive by 59% of the respondents. It is likely that, central and eastern European countries will increase their share in customer facing service for companies which are serving European market. Also, 41% of the respondents mentioned china as attractive location, although china is immature outsourcing destination and it lacks English speaking people. However, many companies are starting their subsidiary company in china.
This outsourcing survey also focused on failure rates. It mentioned that, only 4% of the software outsourcing buyers are dissatisfied with he service while 42% are very satisfied. While wide spread speculation is that, very high percentage of buyers are unhappy. Survey also revealed that 48% people believed that, outsourcing has improved customer satisfaction while 64% believed, organization planning has improved.
Monday, September 05, 2005

Nasscom introduce exams to improve outsourcing quality

Nasscom which is National association of software and servicing companies have launched national entry exam to improve quality of graduates who are recruited into call center and IT positions in the outsourcing industry. Initially this three month pilot will run in Bangalore, Delhi and Mumbai. It will cover 36 K IT and business process outsourcing companies and 15000 graduates. Aim of this exercise by Nasscom is to improve graduates and make big trainable work force into an employable work force. It is believed that Indian BPO and software outsourcing companies are employing around 350,000 people. But current employers are under very high pressure because of high attrition rate and lack of competent staff. By 2009, this industry will require around 1 million skilled people and thus companies will be under more pressure in managing their staff. Skill test by nasscom includes listening and typing skills, verbal ability and spoken English, numerical and analytical skills etc. After successful completion of this pilot project, nasscom will start national roll out which will result in the saving of around 50% cost of recruitment.
Friday, September 02, 2005

Software outsourcing and offshore software development

Software outsourcing and offshore software development is the trend and current flavor of business. 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.
Thursday, September 01, 2005

Outsourcing meet

Widely known as SISI, Small Industries Service Institute, Mumbai 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.