software outsourcing

A blog related to software development company and offshore software outsourcing

Monday, March 13, 2006

Software Vendors find increase in Offshore Software Development Cost

Most of the software companies now are engaged in overseas development services regarding
IT problems. Even a small application from big house travels overseas for the development purposes. This indicates the popularity of the IT Outsourcing for the development purpose, still the main reason that is found behind this much transfer of the job overseas is the lower labor rates. Vendors gain lots of cost savings by such movement of jobs overseas. But the recent news suggests that Software Vendors find increase in Offshore Software Development Cost. Such rising costs and handling far-flung groups is arising new challenges for them day by day.

Survey also suggests that for most of the IT companies IT Outsourcing has been standard practice and day by day more and more companies are getting involved in it. And some of the companies are involved very heavily in such Offshore Software Development for a long time. These companies are also increasing their overseas development day by day. Core software programming and development are done overseas and not just maintenance and testing for these companies. It is also found that in present scenario of Offshore Outsourcing companies are more reliable on such overseas development than ever before. But with that reliance on overseas teams, risk and even some disillusionment also are gifted to them.

It is found that several software companies expected huge lower price by hiring overseas developers. Though, such companies found that rates were about 40% lower when all factors were included with. In the initial stages most people were happy and satisfied. It was just that they thought that it would be a paradise.

Offshore Software Development companies are already responding to higher rates and shortage in talents in well-established overseas centers like Bangalore, India and at many more places globally. To meet requirements, less-developed centers in Indian cities, such as Puna, Madras (Chennai), Ahmedabad would start new IT Outsourcing capacity and keep prices from rising at a faster pace. India sustains an advantage over other overseas locations such as China because country has proficiency with English language.

Most IT companies use Offshore Software Development

Though the movement toward overseas services is forcing IT companies to improve their processes for handling distributed teams and some other functions. It is found that several software companies had a single team collected on a single location and they are not so good at distributed programming and services. It is also found that most IT companies use Offshore Software Development; they are going to require to more closely integrating their distributed development teams to stand apart from opponents.

Though one thing is sure the one should not treat this as a cost issue, which is what most companies and professionals did in initial stages. It should be treated as one team having the unique goal and one set of metrics for better Purpose of Offshore Software Development.