software outsourcing

A blog related to software development company and offshore software outsourcing

Friday, February 29, 2008

Challenges faced by Software Development and BPO companies in the year 2007

India has branded itself as the favorite destination for Application Development Outsourcing and BPO services owing to a great combination of lower cost and high quality IT and BPO services. It has been a dominating player in the global market and has claimed the benefits of the globalization opportunity in a big way. There are significant changes happening in the world of outsourcing and the companies need to be alert and proactive towards these changes in order to align their strategies and decision-making with various opportunities existing in the current market.
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Monday, February 11, 2008

Software Development India

The Software Development IndiaIT sector is on track with its growth agenda, despite an appreciating rupee and slowdown worries in the US. The Indian software and services exports are expected to touch the $40 billion mark in Financial Year 2008 ($31.3 billion in Financial Year 2007), contributing nearly 64 per cent to the overall revenue aggregate (Including software exports, domestic and BPO segments).

According to IT trade body Nasscom’s strategic Review 2008, the Indian software and services exports are expected to touch the $40 billion mark in FY08 ($31.3 billion in FY07), contributing nearly 64 per cent to the overall revenue aggregate (including software exports, domestic and BPO segments).

In July 2007, Nasscom had forecast the industry will grow 24-27 per cent in the current financial year and the revenue was seen at $50 billion.

In Financial Year 2008 the domestic market is expected to touch $23 billion compared with $16.2 billion in Financial Year 2007. This means that the Indian IT industry can exceed its aspired target of $60 billion by 2010 in software and services exports and $73 -75 billion in overall software and services revenue by 2010.
The review reveals that direct employment is expected to reach nearly two million – an increase of about 375,000 professionals over Financial Year 2007. The review also reveals that indirect employment is expected to be in the range of 7-8 million.
In Financial Year 2007, the total IT industry revenue (including domestic segment and hardware) was $48 billion. Of this, the total software and services (exports) revenue was $31.3 billion and ITES/BPO revenue at $9.5 billion.
IT services (excluding BPO, product development and engineering services), contributing 57 percent of the total software and services exports, remains the dominant segment and expected to cross $23 billion, a growth of 28 percent in the current Financial Year.
Technology products and related services sector spends worldwide are estimated to have grown 7.3 percent nearly $1.7 trillion in 2007 – overcoming concerns of budgetary cutbacks due to slowdown in the US.
“The robust growth of the Indian IT – BPO industry and Software Development by over 33 percent in the current financial year reinforces the confidence of the global corporations of India”. Stated by Lakshmi Narayan, Chaiman, Nasscom, and Vice-Chairman, Cognizant. Som Mittal, President of Nasscom said “The Indian IT industry- Software Development Services and BPO industry has been rapidly evolving, growth is on track, if not exceed the targets for 2010”.
Friday, February 08, 2008

Indian Cities Competing for Software Outsourcing projects

Its news that IBM is to launch a software outsourcing development in Noida. One of the top 5 upcoming and favorite destinations for IT outsourcing and business process outsourcing? Smaller cities such as Noida are gaining attention as outsourcing costs continue to rise in established centers such as Bangalore. There are many reasons supporting the shift of software and bpo companies from metro cities to mega and small cities. Before discussing the same, let us have a brief look at the growth of the IT and BPO industry.
Few facts questioning prediction of a slowdown in growth of IT and business process outsourcing (BPO) industries:
  • Exports expected to reach $10.5 billion to $11.0 billion this year- The National Association of Software and Service Companies (NASSCOM)
  • Sector employment up by 138, 000 from previous year.
  • Fiscal year 2006-06(ending March) witnesses exports of $8.4 billion, up 35% from the previous year.
This growth in the software outsourcing India industry has made the real estate and labor costs soar and the competition for skilled labor has resulted in attrition levels as high as 30% an year(in Asia), says NASSCOMM. The Software outsourcing India industry also faces tremendous competition from South Asian and Latin American countries and adding fuel to fire, the appreciating rupee has made exports less impressive.
Thus, the IT and BPO companies are starting to set up operations in Tier II cities such as Noida, Mangalore, Chandigarh, Ahmedabad, Pune, Indore, etc which are much smaller in size and can provide the right environment for Offshore Development Cerntre. Major companies such as TCS, Infosys, Satyam, Mphasis, Wipro, etc have set up their centers in Tier II cities such as Trivandrum, Vishakapatnam, etc. We can’t deny the fact that Tier I cities will remain to be established centers due to developed cities, infrastructure, etc. However, smaller cities are attracting bigger companies to set up their operations there due to lower cost(untapped real estate market, local human resource consisting of college students, etc) and better support factors. So the current strategy is to set up operations in multiple cities to reap the benefits of Tier I cities(established markets, availability of qualitative resources, developed supporting industries, etc) as well as Tier II cities(cheap labour, low attrition rate, government support and incentives). Thus we can say that muti-located companies is the new mantra for Software Outsourcing industry in India.
Monday, February 04, 2008

Offshore Software Development with Different Teams

Couple of years back or we can say in early nineties it was something that software development can be done with a Software development Company solely at one place. Now it is changed and different teams are working from different places on entire projects and never meet face-to-face. The fact that is still challenging is that it hasn't reduced the risk and complexity involved in successful project delivery in spite of reducing the frequent-flyer balance of today's developers.
Global development and delivery (GDD) is most fascinating short tem aspect that is consistently keeping management to think of the same. Companies in software development using GDD as a competitive variable; most IT organizations know what benefits to expect from GDD. They usually are less sure about how to achieve them. Still, that hasn't affected the speed of GDD adoption. Frequently, software development demands force IT organizations to take on GDD before they can establish strategies and platforms for success.
As the scope and scale of GDD efforts increase, so does the occurrence of failure. This pattern continues until frustration results in software development organizations concluding that GDD is more trouble than it's worth. Software development has always been a team sport geographical & organizational separations of project Software development Company increases the complexity involved in achieving successful outcomes. Yet global flexibility is the core foundation for achieving advantages in cost, time, and quality. To be successful in GDD, you must protect the Software development Company aspect of application development outsourcing.

Well structured software development process framework gives GDD projects with Software development Company cohesion and direction without sacrificing the flexibility necessary for agile development. This help teams to adopt a single, "common" process for all projects and provides teams with the ability to adopt methods and best practices that are visible, practical, and governed. The platform ties global teams together and reduces the risk of failure as global development initiatives become more complex. With a global process framework, you can easily codify lessons learned and achieve continuous global process improvement.

For example, in defining and implementing a software development project specification, there is a tendency to believe that the more detailed and precise the specification is, the better the expected results from offshore software Development Company. However, in practice, wasting collaboration and communication time between distributed teams on the clarification of unnecessary implementation specifics and style contribute little to meeting the requirements of the end product. Implementation style is difficult to direct across GDD teams. Global methods and process should focus energy on managing and communicating the architecture and requirements. It shouldn't waste time defining the step-by-step directions for how distributed Software development Company members should do their jobs.