Monday, March 27, 2006

Advantages and Disadvantages of Offshore Outsourcing

One should review the advantages and disadvantages of Offshore Outsourcing for the in-house experts or budget, which doesn't allow one to implement a vital Information Technology development project. At the time of final decision of outsourcers required project, one need to choose Offshore Outsourcing vendor that best suits needs. After that the negotiation and preparing a contract is next most important and responsible step.
Before eleven years, the signing of a contract can be an easy thing to do; at that time the signing of the contract was hand written on a piece of paper in spiral notebook. And couple of clauses contained by the contract, it did not take much time for preparation, and no lawyers were involved in concluding it as well. The Offshore Outsourcing Service Provider one is going to sign the contract with that has likely little or nothing in common with them, over discussed, and prepared the contract will have to be thoroughly thought. The Software Development project that is going to outsource should described with the text unequally and in detail.
Prior to the payment if the project will be implemented the text must contain the exact time and conditions of both commissioning and money payment. Due to inflation there will be expectation that the Outsourcing vendor to increase the contractual costs or may be for other reasons; so, the contract requires an additional clause that indicate the inflation adjustment and the other relevant factors as well. Implementing of the Software Development project, an Off shoring service provider is likely to give the services and also fulfill tasks that the contract does not stipulate. So, it requires different clause containing of conditions and formulas that will allow outsourcer and the vendor to calculate the additional work cost, if any.

Offshore Outsourcing service provider

All clients require the provisions of that contract to be as strict and disciplined as possible, but natural it seems to be. No doubt, the contract must deliver for some penalties associated with the Offshore Outsourcing service provider's inability to make fulfill all the contractual obligations. However, these provisions are weapon of double-edged, when service providers face excessively strict terms or conditions and severe by penalties, they try to secure themselves by increasing the profit amount they get out of the project work. For example, vendor knows how to take advantage of outsourcer’s inexperience and include that in the Software Development project the tasks or services that otherwise would be needless.
By providing additional services and fulfilling tasks that are not stipulated by the contract there is another way to compensate for the potential penalties. There would not be any penalties which are imposed, that means outsourcer losing money, if the schedule does not get off track and the project is implemented without any serious problem, so it would be part of the Offshore Outsourcing service provider to be managed to add to the cost of the contract just in that case.