Category: Offshore outsourcing

Here’s Why India Continues to Be the Offshoring Leader

January 18, 2017

When the IT outsourcing phenomenon started in the 1990s, all eyes were on India. During the 2000s, improved broadband connectivity and a tendency to desire a larger share in the software pie motivated other countries in Eastern Europe, Southeast Asia and East Asia to follow suit. IT agencies and software companies quickly sprung up in Romania, Bulgaria, the Philippines, China, Vietnam and even Cambodia. Many clients often wonder if India is still the right destination to outsource their projects. Before we discuss why India might still be a good option for those who seek stability, security and results, let us take a look at some of the advantages and disadvantages that these three larger regions have over India. Past the Iron Curtain – A European IT saga Post-1990, many European countries emerged from the shadows of the Cold War and the Russian influence and quickly began to move toward capitalism. Romania, Bulgaria and Ukraine stood out in particular, as they are encouraging their software developers to attract more international projects. Advantages Eastern European countries inherited the communist-era technical schools, which were given a lot of importance. Governments in Bulgaria, Romania and Ukraine have all invested in IT parks, special economic zones and encouraged both local and foreign businesses to set up offices and grow. Many of these countries are inexpensive, and costs could be comparable to South Asia and Southeast Asia. Eastern European countries have a work culture that is similar to Western Europe and North America. These countries are also geographically nearer to Western European countries and North America, enabling easy travel and similar time zones. Disadvantages There are still communist relics in the way these countries operate. Bureaucracy and red tape play a major role in the way things operate in Easter Europe. There is also a sense of instability in countries such as Ukraine, which have seen political and military upheavals in the recent past. Lack of English language proficiency among citizens The costs can significantly increase over a period of time, especially with most of these countries becoming part of the European Union. The IT Revolution in China and Beyond China emerged from its own shadows during the 1990s, much like other communist countries. China invested heavily in infrastructure, training and business skills, which has helped the country to become a major IT outsourcing destination. Its neighbours like South Korea, Taiwan and the Philippines to present attractive options to software clients who are looking for proficient developers. Advantages Technical education has always been a part of the culture of these countries, enabling them to quickly adapt to new technologies, especially information technology. China is very serious about luring business to its shores, and it actively pursues clients. The Philippines has a culture that is quite Americanized and the country’s citizens speak better English than most Asians. Taiwan and South Korea offer infrastructure comparable to the Western World.   China is one of the most important hardware manufacturers in the world. Disadvantages Most of these countries lack good English language skills. China may be great at hardware, but it still needs to pick up when it comes to software skills. The Philippines is particularly good at customer service, but not so much when it comes to software development. These countries are geographically very far from Europe and North America, making communication and travel difficult. South Korea and Taiwan can be as expensive as countries in Europe or North America. Past the Monasteries and Paddy Fields of Indochina Not forgetting the tumultuous past of Southeast Asian countries, they have become important tourist destinations today. Yet, something radically different ties all these nations together: software development and IT offshoring. Vietnam, Malaysia and Cambodia in particular are investing heavily in IT offshoring, and developers in these countries have much to offer. Advantages Vietnam and other countries in Indochina are very affordable when compared to other countries. Vietnam has invested a lot in training its developers and building infrastructure. Laos and Cambodia are even more affordable than Vietnam, and they also encourage businesses to move projects easily, sans the red tape. Indonesia and Malaysia are known for their software talent, which is steadily growing thanks to technical education. Singapore and Thailand provide state of the art business facilities and are not far away from Vietnam or other countries aforementioned. These countries are well connected to North America via trans-Pacific flights. Disadvantages Intellectual property protection may not be very solid in these countries, except in Singapore. Malaysia, Singapore, Thailand and Indonesia can prove to be very expensive. Vietnam, Laos and Cambodia are still in the process of building infrastructure that is required to run large cloud servers. English language proficiency is limited to Singapore, and outsourcing is usually done to other countries in Southeast Asia. These countries are geographical far away from North America and Europe. India, Still the Leader of Software Development While a number of countries have emerged to become offshoring destinations in recent years, India continues to be the market leader in terms of the sheer number of projects completed, research and development, innovation and infrastructure. The fact that India has been in the scene right from the outset of software development makes it a venerable leader. Advantages A solid economy that is built around software development and IT consultancy and still the premier destination for software development, research, consultancy and education. The world’s largest English-speaking country, with more number of people being able to speak English than in the USA or UK. A strong technical-education oriented culture, which is now increasingly more computer science-oriented. Legal and bureaucratic steps are clear and transparent, with intellectual properties safeguarded. Agencies have the experience, infrastructure, manpower and capital to manage both small and large IT products. Disadvantages Sometimes, the red tape gets in the way Geographically and culturally distant from Europe and North America Not always easy to locate reputed software agencies, as there are far too many of them Work culture is very different from Western countries. Costs may not

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Why Inexpensive Developers Can Prove to Be Expensive In the Long Term?

January 11, 2017

Regardless of the industry that we are in, most of us have witnessed the rise of affordable services, made possible due to telecommuting and remote working. For instance, it is now possible to get your sales copy written at a fraction of the cost when compared with going to a traditional marketing agency. All one needs to do is look around. Yet, even in this post-freelance, post-telecommuting world of agencies and professionals, there are clear demarcations when it comes to pricing of services. This is especially true when it comes to web and app development. There is a grand level of inconsistency when it comes to developers’ rates, for the same amount and level of work. The instinctual response is often to choose the cheapest developer available, so that costs can be cut. Yet, this approach can be very problematic in the long term, even if it helps to save money in the short term. In this article, let us take a look at why hiring inexpensive developers can prove to be expensive in the long term, and what you, as a client, can do in order to mitigate the costs incurred by hiring good quality developers. Here are three important aspects of programming that you risk losing when you hire a one-time developer who is probably very cheap.   Software needs to be updated regularly Once a program has been developed, it is not the end of the story. It still needs to be updated and bugs need to be fixed. When platforms are updated, the software needs to be updated too. Cheap developers will often not provide you with this kind of support, and you may not even be able to contact them on a regular basis. Even if they do, the costs will always add up and prove to be more expensive. Experienced IT agencies specialize in updating previously released software, and ensuring that you do not have to contact different developers each time an app needs to be updated. Code needs to be centralized In order to ensure stability, cohesion and smoothness of a software program, code needs to be centralized. Codes cannot exist separately from other tools that may interact with them. Everything needs to be cohesive. Your inexpensive developer may not take all this into account, and will most certainly not offer to take a look at connecting technologies, projects, etc that may interact or communicate with the current one. This only leads to a situation where you will spend more on tweaking, enhancing and eventually, centralizing the code for your software program.   Programs require maintenance, support and customizations Inexpensive developers often do not provide maintenance services and even if they do, their charges will add up to more than what you probably would have paid an ‘expensive agency’ upfront in the beginning. Lack of support and failure to customize your app or website as and when required can prove to be a big liability. Running to different developers each time will not only cost you more, but will leave your software project incoherent. What is a ‘good developer’ anyway? How does one find them? A good developer is one who is credible, reliable and responsible. Good developers usually have a business address, a firm or consultancy, or a fully-functioning agency. If something goes wrong with your program or software, you will be able to walk-in to their office, and seek their developers’ help, while also being treated to a nice cup of coffee and macaroons. In other words, they are always available even after the first version of the software is released, because as the old saying goes, software development is a continuous process. Yet, there are a few more things you need to consider before you decide somebody is good for your project.   Look for a team of developers Web or app development usually requires the skills of a group of developers. Each developer will probably be good at a different language or skill. Pooling together all these skills within a team helps to build great software programs. A team works as a cohesive unit, and this cohesion is translated to the software project they work on.   Seek accountability and real-time communication Most software projects fail because real-time communication (on the Internet or on telephone) is not available. Moreover, lack of accountability leads to more expenses because if something goes wrong, you are left with your project on your own. A good IT service team owns up, takes accountability and provides great communication. This helps you communicate your problems and also seek help when it is required. Seek agreements, estimates and continued support Professional agencies place a lot of emphasis on legalities and agreements. This is because; neither the client nor vendor should have to keep guessing about the services that are to be delivered. When there are clear goals and objectives that have been printed and agreed upon, the deliverable’s will be so much more efficient. Always look for teams that will list everything in an agreement and hire those teams that offer continued support, even after the project has been delivered. Why are credible and experienced developers more expensive? They spend on training They spend on overheads, which includes a great office for employees to work, good hardware for your software project to take shape, and miscellaneous expenses Their employees are treated better, which means they are focused on the project rather than making some quick money. They are subject to within-group and between-group competition, which ensures software development is competitive. They monitor your project even after the delivery, which ensures that you don’t face problems with your software program after it has been launched. Because, experience and confidence. Look for experience and support, not the initial costs As we can see from this article, it is easy to be lured into the nets of an inexpensive developer, who will prove to be costlier in the long term. You may spend less in the beginning, but

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Tools-to-manage-outsourcing-team

20 Tools to Help You Manage Your Outsourcing Partners

December 21, 2016

Businesses reap diverse benefits through outsourcing. However, managing multiple outsourcing teams can become a challenge for many companies.  When working with outsourcing teams, businesses face challenges in communication, collaboration and information sharing. To engage outsourcing teams personally is another challenge that hinders business productivity.   Even if necessary technology and skills are in place, it is important to use the right set of tools to manage teams to keep a hold over project’s progress and track your teams’ tasks. Use the following popular tools to effectively manage your outsourcing teams and virtual workforce to get the best out of them. Basecamp Managing your business with email chains, file attachments and meetings becomes chaotic. Basecamp counters this issue by organizing your projects, teams and company-wide communication. For instance, if there is a marketing project going on, everybody who is involved with the project sees the same thing on screen. It uses a message board to post updates and feedbacks thereby making everything in order in the form of a story so that it’s easy to get back to it.  In to-do section, assign work and see what’s done and what’s not done without reminding team members about status update time and again. Schedule section shows date and time while docs & files is used to upload images, assets and files making it easy for everyone to find files easily. Campfire is an open chat room to post queries.  Similarly, you can use same set of tools for various other projects. 2. Redbooth Redbooth helps to keep a track of projects and day-to-day tasks of your teams. Connect your chat, email and storage apps in one place.  Streamline your team’s workflow by using checklists and templates. Create productivity reports and Gantt charts at a single click.It has a user-friendly design that keeps a tab on to-do lists and check things off when they are done.  Track task owners, status and deadlines. Use a multiple assignment feature when a task is shared by more than one person. Redbooth can be used by management teams, marketing & creative teams, project managers, IT and remote teams. 3. Process Street Process Street is a powerful tool to manage recurring tasks of your teams. Create process templates and run multiple instances of the template as checklists.  Track progress and collaborate with your team.  User activity can be tracked from your dashboard and you are notified when the task is done. Its simple interface allows you to create structured documents. Intuitive keyboard shortcuts make it a user-friendly tool. Process Street offers a Zapier integration that integrates with over 500 applications to automate tasks. Automatic scheduling, workflow assignment, employee on-boarding are just some of the tasks companies are using Process Street for. 4. Asana Asana empowers team mates to work in proper flow and collaboration. It enables you to track your team’s projects and tasks. Track the progress without scheduling a status meeting or sending reminder emails.  A smarter inbox gets only the needed team updates and no flurry of unwanted messages.Have conversations about your work and turn them into actionable tasks to get expected results. It all can be managed in one place. Asana makes work fun for team members and they are empowered to accomplish the most ambitious goals of the project. 5. Teamwork Projects Teamwork is a great tool to streamline your processes; connect with your customers and collaborate with your team simultaneously. Use Teamwork Projects to collaborate with your team and clients. Your team knows what, when and who needs to do it. Your clients and team know exactly where to look for and store their files. Information is easily accessible through the cloud. Teamwork Desk makes it easy for your team to handle any customer support queries that come their way.  Teamwork Chat ensures better communication by allowing users to be in constant contact through real-time messaging. 6. Liquid Planner Liquid Planner is a predictive project management software for modern business. It takes care of project organization and scheduling so that the teams stay focused and drive the business forward. Using one of its kind predictive planning technology, the scheduling engine estimates how long each task will take, arrange them in priority order. And Liquid Planner will predict when the project will be completed. With advanced workload intelligence and analytics, get a crystal clear view of your team’s work. Your stakeholders get accurate project reporting.  Accessible through the web/ mobile, team members have ready access to documents, comments and reports for seamless collaboration and project execution. 7. Azendoo Azendoo makes teamwork easier and frees from glitches of email collaboration. It is available through a web browser/ mobile app. Create subgroups to share and organize your teamwork. Share information and documents with specific group members.  It integrates with Google Drive, Dropbox and Box to make file sharing easy. See your team’s existing tasks, progress and create new tasks.  Azendoo offers a calendar view of tasks and projects. Use analytics to have a view of the team’s reporting on a particular subject. Track, schedule and even send direct messages to your collaborators. 8. Worksection The workstation offers a lot of features. Manage your business through a single interface. Get an overview of activities and task overdue, tasks due soon, event journals and project lists. Get project overviews in an active and informative format including project timelines, progress and expenses. Manage all tasks, subtasks and comments using a convenient tool. Add custom filter to view customized detail on screen. Worksection further allows you to reassign tasks, change priorities and deadlines. View images, create and share documents on the go. It lists key dates for active projects, birthdays and synchronizes with Google Calendar. 9. Proofhub Proofhub is project management software to plan, collaborate, and organize projects of all sizes. It offers a centralized workspace for task lists, workflows, discussions, gantt charts, documents and calendars.  You can approve files and documents. Every manager is enabled to get an eagle’s eye view of the project. Proofhub runs in the

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IT Offshoring Improves Economy, Canadian Study Suggests

August 12, 2015

A lot has been said about how offshoring is bad for the economy and that it causes a lot of problems for countries that outsource their work. One needs to remember that outsourcing is not a one way process. The country to which work is outsourced often establishes offices in client’s countries and hires locally. Thus, it is more of a two-way outsourcing than a one way process. With that in mind, IT World Canada reported that many business projects have been taken off because of IT outsourcing and that if not for outsourcing projects, they wouldn’t have survived in their home countries. The study was conducted by a market research firm called IDC, which suggested that outsourcing is necessary to offset skills shortage in North America. The study revealed that between 2001 and 2013, IT outsourcing contributed $15.1 billion to Canadian businesses. This was done through saving costs and decreasing expenditures. It is expected that by 2018, Canadian businesses will benefit from an additional productivity sum of $17.8 billion. It is not just about  cost reduction or skills shortage Mark Schrutt of IDC explained that companies are beginning to outsource jobs not only because of cost reduction or skill deficits but also as a capacity play. IT unemployment in Canada is about 1 or 2 percent. Thus, companies are cutting back, rather than worrying about skills shortage. Offshoring, according to him, is likely to grow in India, South Africa, the Philippines, the Caribbean and other English speaking countries. He also revealed that two thirds of the revenue comes from Capgemini, Hewlett Packard, CGO group and others. The rest of it comes from companies in India, he explained. Companies that previously outsourced locally are now doing it on an offshore basis. Another trend that is being noticed is that outsourcing and offshoring are moving away from customer-centric activities. These activities earlier included customer service and call centers. Now, offshoring typically involves IT operations. Offshoring is a sensitive topic but it could also be positive Schrutt also maintained that offshoring is a sensitive topic. It is quite difficult to attach numbers when we are discussing people’s jobs and livelihoods. However, what we need to understand from this study is, countries that outsource a lot, end up receiving more revenue one way or another. This revenue can be used to strengthen social support systems and welfare. When people lose jobs they can be encouraged to develop higher skills for which they have access. This leads to a win-win situation where companies that earlier faced bankruptcy or an existential threat, can make profits by outsourcing to offshore locations and countries from where work is outsourced and earn more money in terms of revenue. On the other side, emerging economies depend on offshoring as a source of national revenue and this is particularly true in countries like Philippines and India. Schrutt’s study also reveals that offshoring has had a positive effect on Canadian economy and a number of businesses have actually thrived, even after going through economic crises that threatened their existence. What needs to be seen is how offshoring will continue to be a sustainable model for all parties involved. At the end of the day, it needs to be a sustainable model for everyone. Otherwise, regulations will be brought in place that will affect the offshoring industry. What could be the future? The study clearly states that offshoring IT keeps Canadian firms competitive. If offshoring had a positive effect on Canada’s economy, could we generalize the results to other countries like the U.S., U.K. and others? It is probably unwise to do so until other similar research studies are conducted in those countries. What we do understand at this moment is, when companies outsource to offshore countries, they save billions in expenditure and also pay a lot more in terms of revenue. At least, for the government and the companies of the outsourcing countries, it is a beneficial business process. We must also look at the way IT and cloud are developing. Cloud computing and the emergence of shared IT platforms and infrastructure have given rise to new methods of offshoring, rather making it indispensible to IT development. With this being the reality, we can only expect offshoring to develop further and consolidate its reaches within cloud computing as well.

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Why You Must Choose a Green and Sustainable Offshore Vendor

August 3, 2015

There has been a lot of discussion regarding sustainability of companies. Green and sustainable companies are viewed more favorably and also tend to work more efficiently. Companies that work actively towards reducing their carbon footprints, emissions, energy consumption and electronic waste are considered green in nature. These companies use high quality materials to manufacture or purchase high quality goods, which are environmentally friendly. Companies that are green and sustainable have environment-friendly policies etched into their company objectives. This helps to ensure that they stay right on path and do not deviate from what is written on the paper. It is important to engage with companies that are green and sustainable so that we do not directly or indirectly become responsible for global warming & environment degradation. To be able to remain green, we have to choose companies that have an ethical policy to be environmentally friendly. In a world that is dominated by offshoring and cloud technology, it is important to choose vendors who are green and sustainable. In this article, let us take a look at why you need to do so. Green and sustainable companies offer more Companies, which abide with green and sustainable policies, usually, provide a better quality of products & services. Companies like Apple are deeply invested in remaining environmentally friendly and clean. Naturally, they end up using high quality products, which are not environmentally damaging. That also results in better products and services. For instance, companies, which do not use high quality of products, often manufacture products, which consume a lot of electricity and energy. Similarly, if a cloud company is energy-friendly, it will, in the long term, prove to be beneficial to you because you will save more on energy costs. While using the cloud is sustainable in itself, it is nice to choose a vendor who is also environmentally friendly. This helps to boost your morale and to promote environment friendliness. It also works better for your image when you say you only deal with green and sustainable companies. This helps in brand building and in ensuring that you are firmly etched in the list of green & sustainable companies. Green and sustainable companies tend to practice ethical business It is a long held tradition that people who speak well and do well also tend to be good people. It is uncommon to find people who are kind to people, usually, being unkind to a select few. On this note, it is safe to assume that companies that believe in environmentally safe and green practices also tend to be more ethical than mainstream companies, which are only profit motivated. While this is not to say that being profit motivated is bad, it is important to highlight that being environmentally friendly is part of business ethics today. Businesses all over the world have a responsibility towards remaining clean, green and sustainable. If a company is green and sustainable in its approach, chances are that it will be sustainable & ethical in many other ways. This might seem like undue generalization but it does make sense to believe that a company, which strives for the rights of environment and for a safer tomorrow will also care about the progress & safety of its clients. On the other hand, a company that is reckless about environment might be purely profit motivated, without spending time in introspecting about the effects of its actions on environment. Such a company might not introspect about your well-being either. Choosing green and environmentally friendly vendors helps you in the long term Finally, we can conclude that choosing green and sustainable vendors is very important as it helps you in the long term. Companies like IKEA always choose green and environmentally friendly suppliers and vendors because it wants to retain its image as a green company. When you wish to remain green and sustainable, it is important to choose green & sustainable vendors as well. After all, we only want to do what we believe in. If you believe in green IT and business practices, it makes sense to hire only vendors who are green and sustainable. Eventually, it will become a norm in the industry and promote a green outlook globally.

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Infrastructure as a Service: A Beginner’s Guide

June 15, 2015

The way computers and data storage work are very different from what how it used to be. The way storage works, has changed drastically since the emergence of cloud. The cloud has literally changed the way we do business, connect with people and deploy IT solutions. It has also reduced cost burden and increased productivity among companies. This has helped companies to focus on their core competencies, while using services on a shared platform. Most importantly, the cloud evolution has helped companies to establish themselves firmly in the IT sector, which earlier was too expensive. Finally, cloud computing has helped companies to access software and infrastructure which otherwise could not have been possible. There are various services a company can purchase through cloud computing models. One of those is Infrastructure as a Service or IaaS. What is IaaS? Infrastructure as a Service (IaaS) is a kind of cloud computing where a 3rd party provider hosts internet based virtualized computing resources. It has started to replace the server you might have once used happily. The trend has changed so much that now you can see companies, who host these servers and allow you to pay for the use of the hardware that they house. IaaS is seen as a cost-efficient and scalable solution as it doesn’t require the same hardware that was previously required. For instance, servers are very expensive to purchase and maintain. Smaller and medium companies simply cannot afford to have an entire server setup built for themselves. It is also quite unnecessary for larger companies to have their own servers when much of their infrastructural needs can be outsourced. Whilst IaaS cuts costs and ensures good service, you need to pay attention to the platforms and software you are using as well. Let us look at some advantages of installing IaaS: 1. No maintenance costs Yes, you heard it right. It is not low maintenance cost but no maintenance cost altogether. Since, cloud computing is done over the Internet, companies don’t have to invest in the hardware required. All of it is handled by the IaaS vendor the company chooses. It also means that companies don’t have to worry about maintenance and replacing old equipment. When there is no maintenance cost, the companies can invest in other things. It also saves on the time to check maintenance and when it comes to business, then time equals to money. This is a very interesting aspect of cloud computing as most companies find it difficult to maintain infrastructure. It costs a lot and is very time consuming. Companies simply cannot take the responsibility of hiring maintenance staff full-time as that is going to cost a lot. The obvious choice is then to outsource to a cloud vendor. 2. Pay-as -you-go model As we discussed earlier, investing in infrastructure can be a very expensive affair. No company can afford to invest so much money in infrastructure when it can be used on a safe and secure shared platform. If need be, cloud computing also allows dedicated servers, which need not be bought. It will be maintained and allotted by the vendor and the client only has to pay for renting the services. This is one of the biggest advantages of IaaS and the pay-as-you-go model essentially means that the use of IaaS is metered in such a way that companies only pay for the services they use & how much they use it. There is no fixed monthly price tag, which is a welcome. Enterprises will know exactly where and how much are they spending & whether it is worth it. If you have used less of IaaS, your costs will match that. If you have used it excessively, your bill reflects that. The payment charges are transparent and therefore, you don’t have to doubt the credibility of the service. 3. Multiple user access IaaS provides multiple user access, which acts as one of its key points. In an era that has to make do with virtual teams, this aspect of IaaS comes in handy. Multiple User Access ensures that the confusion and the chaotic situation where a single user trying to handle multiple responsibilities is avoided. It also helps in improving the efficiency and the speed of work & definitely contributes in reduction of cost. It offers a great solution to start-ups that can’t afford to pay separately for each user. At the end of the day, it boosts flexibility and versatility within an organization. This is important to maintain the cohesiveness that exists within a company. 4. Strong reliability and performance IaaS is a very reliable option and its performance is, without a doubt, excellent. As IaaS reduces cost and time in maintenance & provides multiple user access, the performance of the company increases too. The IT team won’t have to worry about maintaining the hardware or keeping a track of it. It can concentrate on improving and adding new contributions to the company. This also brings us to the question of IT teams innovating and adding value to their home organizations. Instead of spending precious man-hours on infrastructure, they can focus their time on more complex and valuable tasks. 5. Scalability When it comes to business, nothing is the same as the previous day. The work structure can change from week to week, which demands for a dynamic infrastructure that can handle a large variety of requirements that are placed upon it. With IaaS, resources can be made instantly available for the ever so fluctuating activities. It also effectively eliminates any kind of downtime needed to add to or adjust infrastructure requirements. For example, if there are some new demands that suddenly arise, IaaS services can upscale quickly and easily to meet the growth. If there is a drop in demand, services can scale downward and save resources from being wasted unnecessarily. This shows how IaaS can mold itself to fit the company’s needs. 6. Easier access IaaS also provides easier access for employees and entrepreneurs who

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10 Ways You Can Maximize Cloud Outsourcing Success

May 13, 2015

Outsourcing anything can have its own share of worries ranging from cost cutting to quality. But without a doubt, outsourcing has been proven to be very beneficial. The same applies to cloud outsourcing too, and a successful, well thought-out and realistic plan can take your company to higher peaks of benefit & cost-savings. The number of benefits are plenty and to name a few, process improvements, expanded talent pools, cost containment, improved focus on core business and reduced time-to-market are essential. Even though, the benefits might seem luring enough to consider cloud outsourcing, you cannot turn a blind eye towards the inherent risks involved. An unsuccessful outsourcing project might have to compromise with the anticipated benefits. How about minimizing possible risks and maximizing the success? Just remember that no plan will give you a magical gain, you have to initiate a plan and wait for it to reap good results. The most important thing is to make a well-informed choice. Do not choose a plan only for the reason that it was successful for someone else as it might not work for you. Choose something that is perfect for your company and once you have chosen it, stick to it & follow the ten important steps below. 1. Clear objectives Before starting any kind of plan, your objectives need to be clear. A successful outsourcing strategy always begins with clearly defined objectives and measurable goals. As these objectives state the reasons for choosing an outsourcing program, throws light upon its business value and also provides a working framework of which vendor to choose, which model to use and to estimate the risks ahead, they also provide the context, which will help you to evaluate how successful or unsuccessful your strategy is. You can use these objectives as a scale to measure your performance and improve on it. 2. Realistic expectations The importance of setting realistic expectations cannot be stressed upon enough, while realistic expectations can motivate you. The brunt of unrealistic expectations can depress you. If you are a startup, you tend to decide ROI of the first year as a determinant of your plan’s success and this is the biggest blunder you can commit. Don’t be tensed by the high percent savings claimed by others. Forty percent savings or greater are rare and there are many costs like vendor selection costs, increased communication costs, redundant oversight, lessons learned, infrastructure and other “hidden” costs that will minimize your first-year performance. 3. Estimate the costs Like maintaining realistic expectations, it’s very important to estimate the costs accurately. The pressure to find a low cost plan hangs like a knife over your head but you cannot avoid certain costs. Some costs that cannot be avoided are the costs pertaining while selecting a vendor. This can take several people several months. Transitioning work and business processes, all the knowledge about the current work and the previous work need to be transferred. Maintaining of existing workforce, you can’t forget the people who are already working for you. Can you? 4. Assess your risks A risk-mitigation plan is a touchstone to check the viability of your outsourcing plan. It is not enough if you have a list of potential risks. You need to have a plan to face risks and not let them harm your outsourcing plan in an irreversible way. An aggressive risk-mitigation plan, which is thorough and well-thought-out can be time-consuming to produce & manage but it is worth to the last penny and minute spent on it. There are certain important things to consider while planning such as the impact, probability of the risk, your ability to control it and how effectively can you control it. 5. Objectivity in tracking benefits Don’t go overboard with the result estimation. Don’t show the results more than what they are just to maintain the expectations. Let the numbers tell the true story. If you have received lesser than expected, you need to find solutions to avoid these shortcomings. If you have gained more than expected, don’t underplay it. Wrong estimation of the results can be catastrophic for your company’s growth. While calculating the results, don’t separate overhead costs and project cost, as overall results matter in the end. You need to be able to find and use practices that will give you maximum results for a long term. 6. Correct outsourcing model While ensuring that all aspects of your outsourcing plan is important, choosing the correct model for your company needs to be kept at the pinnacle. When it comes to choosing the correct model, don’t jump on horses and choose something that you have heard great things about. You need to be sure that the model you choose will meet your company’s requirements, will be successful and fits your current circumstances. Learn about different models, go through its pros and cons & make an informed decision. Finally, choose one after you know its contractual flexibility, scope and distribution of responsibility. 7. Choose the right business partners If choosing the correct plan is the first step, the right business partners come right after it. The right business partners can compliment your company and make the model successful. The business partners you choose need to felicitate your objectives. Many vendors offer predefined structure of working, irrespective of how tempting it is. Don’t choose partners just at that. While trying to find a partner, ensure you follow request for information and request for process. These are very important steps. Find out about all the vendors available and then decide on who is perfect for you. 8. One step at a time Do not get into a frenzy mode about wanting a breakthrough with your very first project. Your first project needs to be treated as a way to get other projects. The beginning needs to be slow and cautious. Remember that the growth of your model depends on the success charts of the projects. Each successful or failed project is important to assess the growth of

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Is Romania On Its Way to Becoming the Next Outsourcing Giant?

February 23, 2015

Eastern Europe was not expected to become the next outsourcing destination until a few years ago. With its painful past and difficult history, Eastern Europe has long been an enigma to westerners. Yet, Romania has emerged to be one of the outsourcing success stories. Located in the southeast of Europe, it borders Ukraine, is close to London and Berlin & is in the heart of European culture. The shared culture, geographical proximity and superior technical education have all made Romania a more attractive destination than other countries. Moreover, most Romanians have begun to speak in English. Not just that, they also are proficient in French and German. All these factors have led to Romania becoming one of the most sought after IT outsourcing destinations. In the year 2013, the country’s IT exports surpassed €1.4 billion. If we look at it from a per-capita perspective, it is $99 or more than two times of what India exports. Most export services are related to custom development and that has taken Romania by storm. In fact, most people think Romania might well be on its way to becoming the next India, though much smaller in size. What makes Romania so attractive? Other than the aforementioned factors such as geographical and culture proximity, language and technical skills & work ethics, Romania takes its outsourcing industry very seriously. The country has moved ahead of its neighbors to create a business friendly environment. The fact that it falls within Eurozone makes it a more attractive place as well. Though the standards are quite European, it still costs less to hire a Romanian programmer than a German or French programmer. It is the cost factor coupled with a lot of others that we just mentioned, which make it a very attractive destination. The country has its economic strengths Romania is the 22nd largest economy in Europe and the 17th largest in the European Union. This gives it a definite advantage over other smaller countries with a less strong economy. There is also a healthy level of domestic consumption and investments from foreign companies, which helps Romania to maintain its burgeoning outsourcing industry. Moreover, its economy is only getting better. Greece, which is very near to Romania, is going through very difficult times. Germany has tried to impose austerity on Greece while it refuses to do so. On the other hand, Romania is seen as an attractive destination to invest and do business. What is the Government doing? The Government is investing in helping Romanian youth to seek technical education, a trend that is normally not seen in Western Europe. The Government is also looking towards making it easy for IT professionals to work in Romania. One of the most drastic measures by the Government was to waive off taxes for IT workers. In fact, there is a 100% tax exemption for IT employees who work in Romania. This has led to more youngsters taking up IT courses and becoming good at it. By creating a favorable business atmosphere and removing the red tape that is, usually, associated with countries like India, Philippines and Brazil, Romania is making it very easy for clients to look for IT service vendors within Romania. The Government also announced a 50% tax deduction for costs related to R&D operations. By publicly funding IT parks and business zones, the Romanian Government has gone a step ahead in attracting big businesses to the nation. Most analysts expect this trend to continue for the next five years at least. The future of outsourcing in Romania Though Europe is going through a crisis right now, the future looks quite stable. France, Germany and the U.K. have a lot of IT requirements. These countries will, usually, prefer vendors who are located nearby. Bucharest is a 3 hours flight from London and that adds up to its appeal as well. In the near future, we expect Romania to create its own niche as a nearshore destination for European countries, especially, for France, Germany and the U.K. Thanks to its Government’s pro-business policies, it will only become easier to set up offices in Romania and to outsource projects.

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Is IT Outsourcing Cooling Off Because of the Cloud?

February 6, 2015

There has been a lot of talk about how cloud has changed the way we understand IT and the way we have begun to handle our technical requirements. Thanks to the cloud, it is no longer necessary to have on-site and legacy systems which were the norm just a few years ago. Shared cloud spaces have helped many companies to access software that they otherwise could not have. For medium and large-sized companies, the cloud has given them an opportunity to reduce costs, cut down on unnecessary projects which were outsourced earlier and also form an entirely new paradigm with respect to how we view IT outsourcing. Does this mean that cloud computing is going to take the steam off outsourcing? Not really. In this article, let us take a look at how the cloud has actually benefitted the outsourcing industry. Of course, there are many naysayers but the fact is cloud has helped software service providers to move to the next level and offer better services at a lower cost. At the end of the day, it is proving to be a win-win situation. IT outsourcing is turning hybrid Outsourcing initially meant that companies sent their software projects and development requirements to companies that offered these services at a lower cost. As outsourcing began to grow as an industry itself, companies began to focus on quality more than the price. It is not an accepted practice to outsource IT development and focus on core competencies. Outsourcing helped small and large companies to reduce the burden of purchasing & installing hardware, software and then running them. It reduced the need to hire full-time employees who obviously come at a high cost. However, the advent of cloud began to disrupt this comfortable position. Cloud allowed companies to take their outsourcing a step further. It allowed them to go hybrid. Companies no longer had to maintain on-site infrastructure nor did they have to outsource everything to vendors. It was now possible to purchase only certain IT services while retaining the rest on-site. Cloud services have grown by leaps and bounds & there are several companies that offer a number of services. It is now possible to not only outsource some of the tasks and projects to different companies but also maintain on-site infrastructure for tasks that are deemed too sensitive. This sort of hybrid cloud computing gave rise to people within the outsourcing industry that the cloud will usurp their traditional domain. These fears were found to be irrational. In fact, the cloud has only helped the outsourcing industry to grow much further. Vendors can now offer a plethora of services over the cloud for an increasing number of clients. This has led to the democratization of IT outsourcing industry; and that is always a good sign. What cloud federation is doing An important development is that of cloud federation. It refers to deploying and managing a number of internal & external cloud computing services. It is almost like a federation of states, of which each has a different role to play. Likewise, all the individual parts within a cloud federation have their own roles to play. However, there is always a sense of cohesion between various IT services managed and deployed over the cloud. Outsourcing vendors have found this model highly effective in encouraging clients to purchase more services, which are customized and tailor-made for their needs. The cloud, as a federation, is an important aspect because as we move from legacy systems to the cloud, we will increasingly need the services of different cloud companies for different services that they offer over the cloud. It is simply not possible to get everything from Amazon. Cloud federation will actually boost outsourcing Whether CRM, gaming, e-commerce, social media, IT or just whatever it might take to run your business, it cannot be outsourced to a single entity. As more vendors move towards the cloud as well, you will have to create your own cloud federation, which consists of a number of cloud services from different providers. This cloud federation will likely dominate the future. It will also help boost IT outsourcing instead of reducing the share of vendors in the market.

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Outsourcing to Politically Unstable Countries May Wreck Your Business

December 1, 2014

Outsourcing has become an integral part of doing business and most enterprises engage in some kind of outsourcing, either onshore or offshore. What started as a movement restricted to certain IT companies during the early 1990s has now become an accepted way of doing business. Outsourcing as a practice has helped companies to become leaner and more efficient, thereby allowing them to concentrate on their competencies. India, the Philippines, South Africa and China to an extent have been the largest outsourcing destinations for companies in the U.S.A. and U.K. In the last few years, countries like Bulgaria, the former Yugoslavian states of Serbia, Bosnia and Croatia, Romania and even Ukraine have begun to become popular as outsourcing destinations. However, all countries are not the same. Some countries have better infrastructure and are closer in culture to the USA or UK than others. Others suffer from political instability and economic difficulties. Before outsourcing, you need to ensure that the country is not going through major economic or political upheavals. In this article, let us take a look at why it is a bad idea to outsource to politically unstable countries. 1.      Risk of policy changes Most politically unstable countries often have shifty policies that are not consistent with a long term business and investment strategy. Thus, if you end up investing when you think it is favorable, your outsourcing business may suffer when the government changes. Sometimes, governments change within months. Make sure you do not invest in a country here governments fall and rise within a short period of time. It may seem like a vibrant democracy but if the governing bodies are not consistent, your investment projects may suffer. 2.      Risk of unforeseen non-working days Politically unstable countries also have a high rate of labor strikes and even curfews. Such situations may lead to non-working days and the loss of precious man-hours. When you outsource your project to a country, you expect that your tasks get completed on time. If the employees in your outsourced team do not turn up to work because of strikes and curfews, you will not only end up with a delayed project but also a loss of money and effort. 3.      Security risks Countries that are unstable often have security risks. This may affect you in a number of ways. If your data is compromised, you may not have readily available IT regulations on which you can rely. When there are real security threats, you may not even be able to find legal recourse and that may cost you more than you intended to save with the help of outsourcing. 4.      Risk for infrastructure Politically unstable countries are often prone to demonstrations, riots and violent protests. If you have the bad luck of having an office right next to a violent demonstration, there are chances of damages to your physical infrastructure. Somebody throwing stones at your glass windows is enough to cost a significant amount of money for repairs. While all this may seem far-fetched, such damages do occur in unstable countries that are prone to protests and violent demonstrations. 5.      Unfavorable business atmosphere Some countries, though peaceful, may have an unfavorable business atmosphere. This has got more to do with the political and economic policies of a country rather than any form of instability. If you continue to see business-unfriendly governments rule a country repeatedly, you can take that as a sign of being investor-unfriendly. Your projects may get stuck in red tape, you may have to spend unnecessary time waiting for approvals and worse, you may encounter corrupt officials. Final thoughts However tempting it may seem to invest or outsource to a country just because everyone else is doing it or because the brochures are attractive, think carefully. Make sure that you outsource to countries that have traditionally been long term players in offshore industry. Those countries include India, the Philippines, South Africa, Brazil and certain Eastern European countries like Bulgaria and Croatia. Speak to a consultant and discuss which countries are best for your particular business and what risks you may encounter in that particular country. Take decisions only when you are convinced about the lack of risks.  

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