Future aspects of Offshore OutsourcingFriday, January 13, 2006
Offshore Outsourcing has an ability to hold skilled overseas staff or workers in a small part with minimal labor cost which is exhilarating to several entrepreneurs for their organizations. The utilization of resources especially in sectors like IT projects, accounting, network security, Human Resource Management and Development, advertising, animation, healthcare-related jobs, financial investment and consultancy, legal services where Offshore Outsourcing is taking place.
Before couple of centuries when the colonial powers started taking raw materials from these respective colonies and sell these products after processing into manufactured commodities. Such sale gave arise to the concept to Offshore Outsourcing. The commodities are sold in the product label as ‘software’.
The British and other imperialist in 19th century rampaged the small scale and cottage scale industries in India and other respective countries because of industrial revolution; they started selling processed goods to the natives having a better quality. Now in 21st century the tables seem to have turned by taking advantage of the cheap labor in developing countries, many Multi National Company’s have set up their subsidiaries in India and in other neighbor nations like China, Malaysia, Africa, Israel, Ireland, Russia and given the name of Offshore Outsourcing.
The burn up time and budget on proper product innovation is much less than what you might think by matured Software Development Company. In fact, in year 2002 software outsourcing fell by 2 percent, after having consistently grown at 15 percent annually since year 1998. By large accounts for less than 30 percent of the Research and Development budget the small piece of the pie is being further clutched from every directions. First of all, R&D spending by public American Offshore Outsourcing organizations is also lessening from their experiences.
And the second is Research and Development budgets which are being consumed by ever-increasing maintenance-related activities, like bug-fixing, upgrades and minor enrichments. Maintenance of agreements with huge client base mount up over the years mandate this support. Most of these cuts are captivating a bite out of new product development in Offshore Outsourcing.
The world saw that in the past decade by Offshore Outsourcing, United States companies alone have invested $7 billion in their subsidiaries in India, which picked a net saving of more than $26 billion.
Software Offshore Outsourcing companies can not successfully produce real advance with such restricted resources accessible. Instead, what amounts to software maintenance tasks the finest and brightest that are decided by jammed down? Many of these developers would be happier with and better suited for truly pioneering work was the irony of the story, but organizations have painted themselves into a corner. This is where Offshore Outsourcing Development can facilitate. In most cases, a well-executed software development program can help release an added 20 percent of the Research and Development budget for new innovation while continuing to meet the maintenance obligations of mature firms by Offshore Outsourcing.