software outsourcing

A blog related to software development company and offshore software outsourcing

Thursday, August 31, 2006

Offshore IT Outsourcing and American Software industry

There are numbers of critics, who condemned Offshore IT Outsourcing and Software Development as everything from shortsighted to non-American, but it might well wind up rescuing the American Software Development industry. Today, for remaining competitive in the international market, Software Organization from USA must continue to drive innovative ideas. However, innovation and conceptual ideas are being strangled through insufficient research and development budgets on the smaller firm side and an overspending hangover on the client side. Offshore IT Outsourcing could help on both fronts.

Some recently happened things in the way American organization are using Offshore IT Outsourcing labor have sparked heated controversy. But it is understandable considering that jobs are at stake in an already tight economy. But while it may be human nature to cling to the status quo, the software development industry will be better off adapting to new changes and allowing innovative ideas to flourish.

For a mature Offshore IT Outsourcing and Software Development Company, spending more budgets on true product concept is a lot less than what one might think. Generally, it usually accounts for less than 35 % of the research and development budget. From two directions this small piece of the pie is being further squeezed. First thing is that overall research and development spending by public American Software Development organization is shrinking day by day? Most of these cuts are getting a bite out of new product development. Second thing is that, research and development budgets are being consumed due to activities related to ever-increasing maintenance like minor enhancements, bug-fixing and up gradation. Maintenance agreements with a large client base accumulated over the years mandate this support.

Software Development Companies can not successfully generate real innovation with these limited resources. The irony is that many of Software developers would be happier with and better suited for truly work. But organizations have painted themselves into a corner. This is where offshore IT development could help. In most of cases, a well-executed Offshore IT Outsourcing program can help releases an additional 20 percent of the research and development budget for new innovation.

The main thing is to point for cheap labor and that would be the main incentive for this approach, this is only a short-term fix. The real reason in Offshore IT Outsourcing could help resuscitate software development in the America is cultural, not economic. As an organization matures, ideas tapers off and grunt work multiplies. The real truth is that American development shops don’t find grunt work appealing. USA Software Development professionals have a passion for innovative ideas. They are pushy and interested for the state of the art in design and functionality.