Thursday, February 09, 2006

Offshore Outsourcing: The competitive edge

With this article one can have close look at the issues of Offshore Outsourcing and IT services, with particular emphasis on the implications of using an external vendors for technical Software Development. With the rapid change in today’s scenario and in respect to the highly competitive market, more and more companies are seeking new ways to cut their costs; hence maximize use of resources and focus their core energy on overall improvement by the way of Offshore Outsourcing. The point of interest is that many firms have adopted this way to achieve goal with objectivity through Offshore Outsourcing and many other traditional internal service departments.

Separation of Software Development :
The step to Offshore Outsourcing is not only dealing with vendors who fully understand their requirements which also one of the main concerns expressed by companies and this is particularly true for technical Software Development. It is imperative to keep checking the area for ensuring that the diverse projects run by scientists and engineers are carried out using the most appropriate technology and by people who can understand and work closely with technical staff of Offshore Outsourcing which separates from the provision of general Information Technology services. There are no vendors who can possibly excel in all IT functions and areas, so by finding specialist organizations for each business sector allows to take advantage of their innovative approach and experience in core business. Multi supplier approach also ensures that outsourcer is not limited by the quality of a single vendor’s skills and technologies.

Alternatively, if Offshore Outsourcing would be carried out with an ad hoc fashion then their might be possibility that the project managers simply move from doing the work to managing a group of uncoordinated vendors. The companies can be vulnerable to escalating fees, inflexible services and inappropriate skills by signing long term contracts or tying in to one supplier. The solution would ensure that the suppliers have the incentive to work together to provide a seamless service, resolving inter-contract problems by themselves.

Offshore Outsourcing

If Offshore Outsourcing is carried out in a rational way, by using vendors specializing in each of the services to be offshore, the selected suppliers provide a seamless service to the company and the organization reviews its needs on a regular basis.

Reason of Offshore Outsourcing:
Offshore Outsourcing routine tasks to a partner provide staff is becoming involved in activities that create real value for the companies. There are many large Information Technology companies running as an operations utility by several hundreds of IT staff. Their main role is to run data centers, supply managers and scientists with the processing power required, develop bespoke applications, recommend and install systems and provide help desk support. The main advantages in budgetary terms are the ability to turn fixed cost into variable, because of the ability to plan budgets more effectively as rates are fixed, since staff is only on site when their services are required.

With the negotiation of a framework agreement with vendors defines the main issues of importance to the scope and targets for each individual contract. The partnership promotes an understanding of organization style and culture which means that the vendor is easier to manage than a group of contractors. Long term, the supplier's recruitment policy can reflect the needs of the outsourcer. In an ideal partnership both parties benefit from a well negotiated Offshore Outsourcing arrangement.