Category: Offshore outsourcing

A lot has been written about the importance of Eastern Europe as a nearshore destination. Nearshoring activities take place in countries which are closer in time and culture to the client countries. For instance, Ukraine, Serbia and other Eastern European countries are closer to Western European countries in terms of culture and time zones. Nearshore destinations make things easy When we compare France with India, the cultural difference is huge. However, though French people and the Serbians speak different languages, cultural similarities and geographic proximities trounce the differences. Thus, nearshore activities are considered to be much more advantageous to companies that outsource work. Until now, countries like Bulgaria, Romania, Serbia, Ukraine and Greece have been nearshore destinations for both Western European countries and the North American companies. And it did work well for the clients as they found working with people who wake up at the same time as they do, much easier than having to deal with people who are between 6-12 hours away. However, things are not looking too good in Eastern Europe. In fact, recent trends indicate that Eastern Europe may gradually lose its prominence as a nearshore destination. There are a number of reasons for this pessimistic outlook. In this article, let us take a look at why Eastern Europe may be losing its mojo. Political upheavals As we all know, Eastern Europe is not the easiest place to be a politician today. Whether one is running for office in Serbia or someone is trying to become a mayor of a Ukrainian city, things are as complex as it can get. Serbia, Bosnia & Herzegovina, Croatia and other former Yugoslavian countries have had a disturbing history, all of which leads to a general sense of doom and gloom. Politics in these countries are invariably a reflection of what happened two decades ago and people are still coming to terms with the ravages of political upheavals. All this is reflected in the way they conduct business too. Though most countries in Eastern Europe are stable today, their political issues are not yet resolved. Serbia, for instance, is trying to become a member of the European Union but is still under the watchful eye of Russia, its prominent ally. Serbia is also engaged in disputes with its neighbors including Kosovo, which Serbia claims as its own. All this is not recognized by the European Union and financial policies are often a result of these disputes. Bad economy Economy in Europe, as a whole is not really great at the moment. Portugal recently got its way out of EU handouts but others have not been so lucky. Greece is mired in economic difficulties and so is Italy. With that in mind, we must remember that Romania, Bulgaria and Serbia are all some of the poorest countries in Europe. Their economy needs to improve a lot and the infrastructure isn’t developed yet, because of the conflicts that they have experienced. When we say infrastructure, we mean in terms of information technology. Of course, Serbia, Bulgaria and Romania have all responded very well to infrastructural demands but the sheer amount of economic troubles has often overwhelmed these East European countries. With that in mind, we must remember that Ukraine is one of the largest outsourcing destinations and its economy is one of the reasons why its people are so disenchanted and disappointed with the way things are. Naturally, the country is not stable at the moment and it is not clear how long it will take for Ukraine to come out of the economic and political mess it is in right now. Wars and conflicts Europe is not the first region that comes to our minds when we speak of wars and conflicts. Unfortunately, no region in this world is safe from wars and conflicts and every region has populist movements and conflicts that feed into the troubles experienced by nations. Some of the most conflict-hit regions of Europe are Serbia, Kosovo, Albania, Bosnia and Herzegovina, Ukraine, Romania and Moldova. All these countries still carry disputes that from the days of Soviet Union. All these countries were under the influence of former Soviet Union and currently, under the influence of Russia. Ukraine is descending into a civil war-like conflict whereas Serbia is still trying to fix its problems with Kosovo. Meanwhile Romania and Moldova have their own regional problems where people with regional interests have begun to demand independence. With all these conflicts in mind, it is not possible to see a positive growth in terms of outsourcing and near shore activities. One needs to wait and watch to understand how things might develop but at the moment it does not look rosy. Natural disasters It may be surprising to learn that Eastern Europe is also plagued by natural disasters. Recently, Both Serbia and Bosnia were flooded after torrential rains. More than 40 people lost their lives and the floods have been described as the worst in history. Both Bosnia and Serbia suffered equally, though they have been rivals for a very long time. Natural disasters like flooding and extreme temperatures are not unknown to Eastern Europe. What makes it different from natural disasters in China or India is that these countries are very small, with very fragile infrastructure. Even a small damage to their roads and other infrastructure is enough to cut of large parts of the country. This is not so in India or China, where the area that is inhabited is so large that disasters are usually centered in small pockets. Nevertheless, these problems are often enough to drive away investors and look for greener pastures, where natural disasters are far and few. It remains to be seen how Serbia and Bosnia will cope with the recent floods. General sense of pessimism All these problems in Eastern Europe have led to a general sense of doom and gloom, which is not good for anyone. When there are political conflicts, wars and natural disasters happening, economy is bound

Outsourcing specific business processes to offshore destinations has grown over the years while deriving major benefits for businesses. Though cost-saving has been a popular idea in the past, outsourcing today portrays a much larger picture with serious implications for your business. There are many reasons why companies choose to outsource. It is a strategic decision made by the company for the following reasons: To focus on core activities by optimizing internal resources – It is a common practice to outsource task, which are not your expertise. But here we are talking about those tasks that consume unnecessary time and administrative cost of your business. For instance, as a life insurance company, you can outsource the task of managing bills and receipts, customer care etc. This way you can focus more on marketing, developing new customers, policy design and research. Shifting to new technology – You might not be aware of emerging technologies in software development even though it is crucial for your business to stay ahead in the market. Perhaps, it is not your fault. When you rope in an experienced outsourcing partner, they help you to invest in new technology. This makes sure that you don’t compromise on product quality and improve productivity of your processes. Increase your capacity to bear risks – In the event of any natural disasters or a major human error, your IT system can get damaged, thus, affecting your operations. Outsourcing partners are very well-equipped with a back-up plan and turn around the system in no time. Cut down infrastructure cost – Shifting to new technology or maintaining existing technology requires huge investment on machinery, office space, license, hardware and software. To get rid of all these additional costs, it is a wise decision to leave it to the expert outsourcing partner who can do so at a much lesser cost. Access to highly skilled talent – Outsourcing destinations in Asia has a surge of qualified professionals. They understand your needs and deliver a high service quality. Besides that, other reasons for outsourcing include cost-cutting without compromising on quality, overcoming seasonal shortage of labor and scarcity of talent. Despite selecting a partner of your choice, it is common to find dissatisfaction with the work of your partner. It is quite possible that your partner started off well but deteriorated in quality later. The first step is obviously to analyze the situation by pin-pointing the areas of improvement. But if it does not work out and your partner fails to listen to you, then it is time to re-consider your decision. A common sign that you have chosen a wrong outsourcing partner is when your partner starts measuring success through savings and efficiency at the expense of service & product quality. Apart from that, following are the five signs you need to observe that indicate you have chosen a wrong outsourcing partner: Reduced client satisfaction – Client satisfaction is your top priority. Only a satisfied client will recommend your services to others. The outsourcing partner needs to give the same level of importance to your client as you do. To understand your business needs, he needs to understand the needs of your client. But when your partner does not care about your clients and is not flexible enough to bend his approach to serve your customers better, it often aggravates to client dissatisfaction.This consequently leads to poor service quality for your clients. If your outsourcing partner is taking care of front-end services i.e. facing your clients directly, then the issue escalates very quickly. On the other hand, in case back-end services are dispensed by your partner, you get a timely warning from your clients through their valuable feedback or complaints. Remember that the outsourcing partner carries your brand image by delivering his services. Apart from that, there is another concern when your partner keeps your clients lower on his priority list. This is a case when he is serving multiple businesses like yours. This practice leads to unnecessary delays for your clients. High attrition rate – A healthy company always takes care of her employees with a long-term perspective in mind. In return, employees also show their loyalty to such companies which reflects in their tasks. They are ready to go an extra mile in times of need and meet project deadlines.But when your outsourcing partner is short-sighted and starts looking for cheap labor without giving any perks, nobody is willing to work for a long term in such an unstable work environment. His only focus becomes cost-effectiveness. Though it is a great place for a fresher and a temp to gain some experience, an experienced person is unwilling to work for such a company.Employees are the one who take the company forward. A long association with the employees means they understand your old customers and their needs very well. They are the ones who train new talent. Moreover, your clients look for consistency and stability when they associate with your business. Employee base with a high turnover rate means fluctuations in service quality. If your outsourcing partner is marred by poor labor policies and continuous labor conflicts, it poses a threat for your clients. Lack of intent – An outsourcing partner is supposed to give you full support to keep up the level of service delivery. Your outsourcing partner could be plagued by lack of intent when he is quite often citing contractual terms and conditions. He fails to deliver the projects on time and gives excuses.It leads to conflict between your in-house and offshore team wherein the offshore team leader becomes reluctant to pursue his team members. It turns out to be impossible to work with such a partner who is not putting in its full potential. One reason could be that they are overloaded with other projects and take you for granted.While the other reason could be they just don’t want to do it because the management is too lazy to implement and are looking for easy money. It is better

There are a number of challenges that clients encounter while hiring remote workers and virtual team members. In order to avoid problems in the future, you might want to look for some important qualities among possible recruits. Before that, let us take a look at common problems that clients encounter when dealing with virtual team members. Incomprehensible communicationCommunication is a major challenge among global virtual teams. People belonging to different cultures have their own way of communication. Since most of the interaction is devoid of face-to-face contact, team members often miss out non-verbal cues like body language, voice tone and facial expressions. Emotions are completely cut-off from the day-to-day interaction and people react mostly on the basis of electronic messages passed between one another. Moreover, time zone differences make it difficult for the members to conduct frequent video conferences. Recording every task onlineSince there is no common office place for the team members, every task they perform has to be updated in the online directory. Whether it is critical or not, the tasks have to be recorded online on a daily basis for the perusal of the managers. Such data-filling tasks consume extra time and discourage the team members. Though, much of it depends upon collaboration potential of the team using effective collaboration tools. Tracking and improving WIPTracking the work-in-progress of individual team members is crucial for the team leaders to establish their performance level. Setting up KPIs (Key Performance Indicators) and measuring them becomes challenging with increasing complexities of the project. Since, the team members are working in aloof environment, straight-forward and cold feedbacks from managers are quite discouraging for them & their KPIs suffer. Lack of social interactionVirtual team members work in solitude. So, they miss out on office chit chats and friendships. They have limited networking opportunities due to which they feel insecure of their growth prospects. There is no one to celebrate their professional success or motivate them in their downturn. Though there are social media tools incorporated by the companies to encourage casual interaction among the employees but nothing can fulfill the emotional satisfaction generated by face-to-face contact. There are many companies that hire employees who can work from the comfort of their home but considering these inevitable challenges, virtual team members need to have certain qualities that make them fit to work in a virtual environment. Qualities desired in a virtual team member Self-motivationSelf-motivation is the most important trait required in a virtual team member working from home. Their performance, ability to meet deadlines and productivity are all dependent on their motivation levels. Usually, in an office environment, people discuss their personal and work-related issues with their colleagues. This gives them some kind of emotional relief so that they can focus on their work. But there is no such case in a virtual environment. Though work-related issues are addressed from time-to-time by virtual team leaders, nobody brings up their personal issues. Well-equipped and thorough with technologyMost of the time, small companies set a criterion for selecting virtual candidates to be well-equipped with the required hardware and software. In exceptional cases, companies set-up a home office for their virtual employees. In any case, you are required to be thorough with the online technology that helps you to collaborate and communicate effectively with the group. There are many tools and applications that you need to set-up yourself to be able to do that. A person who feels uncomfortable in dealing with technological complexities offered by virtual environment is deemed unfit for a virtual job. High intelligence quotientVirtual team members are required to work in time-bound projects with continuous pressure from the employers. Moreover, there is no physical support available to them, which means they have to handle the entire pressure themselves. If all the team members are able to use their cognitive abilities faster, then it proves fruitful for boosting the performance of the team. Though, IQ level is not related to talent, personality or application but it surely adds to their productivity. Collaborates effectivelyThe team members need to have adequate experience of working in large teams. They need to know whom to collaborate with by excluding people irrelevant to the task. In large teams, members have clearly defined roles and responsibilities. Ability to collaborate effectively will help save a lot of time of fellow team members by preventing confusion and incongruity. Members need to be aware of collaboration using social media tools that help in sharing knowledge and best practices with their colleagues. Efficient communicatorCommunication becomes a challenge when there is no face-to-face contact. Whether it is e-mails or instant messengers, communication needs to be seamless. Team members working in global teams need to possess cross-cultural communication skills. They need to have the ability to work together with people from different nationality and religion. Every person in the team needs to know how to communicate effectively besides language barriers. They need to be active listeners while communicating through video chats. TrustworthyTrust is build through consistency and efficiency of task-completion in virtual teams. In office environment, colleagues, usually, hand-over their task to each other during personal urgency or other priorities and they understand each others’ problems. But as there is no social bonding among the virtual team members, ongoing commitment towards the task is what develops trust. Make sure that the team members have proven track record of meeting deadlines and commitment. They need not be habitual of giving excuses. Check their references. AccountableAccountability of tasks is critical to virtual environment. Virtual team members often hesitate to rely on each other as they have never met in person. Most of the work is interdependent. Completion of one task is dependent on the completion of the other. If one member fails to accomplish his task, it affects the whole team. The whole team becomes responsible for project delay. This causes feeling of distrust. Accountable team member is always dedicated to finish the task irrespective of any challenge he faces. Complex projects have no room for failure.

Virtual team members are scattered across the globe. A poor team leader is often responsible for diminishing co-ordination and productivity among the team members. As a result, you are left lurching in the middle and shelling out money to hire new members & firing previous ones. Poor management leads to project failures, shifting deadlines and poor service quality. Key reasons for the failure of the team are as follows: Lack of clarity – Even though you hired highly skilled professionals, virtual team members are plagued by differentiation. Individual members have their own way of working and a different definition of quality. They act like unguided souls who work hard based on presumptions. The end result is chaos. Insufficient information sharing – Virtual team members rely on tools to communicate and share information with each other. Inadequate training on the use of tools does no good to your company as the employees fail to exploit the potential of tools to share real-time information, thereby, causing lags. Clash of priorities – This highly skilled group of people give priorities to the work of their choice. Consequently, there is lack of co-ordination, missed deadlines and overall poor performance level of the team. A good manager is the one who recognizes these follies and devises strategic methods to resolve such matters. Let us briefly discuss the advantages of having a virtual team on-board before we head towards managing them. Advantages of having a virtual team Reduced cost – Virtual employees can be hired to do the same job at a much lesser salary as compared to your in-house staff. Moreover, administrative overheads are drastically cut down by negating office space and set-up. Even if you set up home-office for virtual employees, the cost is much lower than setting up the office. Centers of excellence– Highly skilled virtual employees are scattered across the globe. Every geographic location comes with its own set of expertise. Global integration– As and when business grows, the virtual team members form a team around themselves. This way, different teams around the globe work together to accomplish a common goal. Structural and demographic diversity – As opposed to hierarchical structure in a traditional organization, virtual teams are often unstructured as the team members belonging to different locations are reporting to different managers. Such diversity brings in varied feedback, work experience, nationality and networking opportunities. Managing a virtual team Classify the processes into task-oriented and socio-emotionalVirtual employees communicate with the help of technology unlike office employees who rely on face-to-face meetings. A task-oriented leadership approach is required to manage virtual employees as it is focused on the completion of particular tasks, which serves as a measure of their success and reliability. In addition to that, human personality evolves by repeating series of crisis and resolution. Pose your employees with challenges continuously to get the best result out of them. Build upon superior knowledge available remotelyEvery virtual employee working from a remote location has some or the other functional expertise. But the fact is that this expertise is not available to all the team members. Replicate the most desirable skill set across the team to improve overall productivity of your tasks through periodic trainings. Share superior knowledge with the team members so that they can evolve, use their existing knowledge to innovate and take a sense of pride in their work. Moreover, it is important that your employees learn with time or else they will have no reason to be loyal to your organization. Encourage self-leadership among team membersVirtual employees are deprived of social bonding with their colleagues. So, it is important to keep them engaged through interaction and information sharing via technology. They are unable to interact with their fellow team members face-to-face, negating the use of facial expressions and non-verbal cues. A team leader has to infuse leadership qualities in the team by asking them to actively share important information and take initiatives. It is essential that the team members are self-sufficient and rely less on the leader for managing their tasks. Focus your HR efforts not only on building virtual team leaders but leaders across the team. Arrange physical get-togethers sporadicallyFace-to-face get-together becomes indispensable when your goal is set-up for a permanent virtual team working on long-term basis. Such meetings improve communication, collaboration, understanding and cohesion among the group. The meetings don’t have to be formal always. Informal meetings like party, family get-together etc. help your team members to further strengthen their bond and generate larger returns for your company. The investment and time devoted in such get-togethers work in your favor considering the scale of your business. Informal/Formal video chatsThough e-mails and instant chat messengers are used for most of the communication needs, there are certain things that can be explained through visual interaction only. Encourage the use of video chat applications like Skype, iChat, OoVoo, AT&T Connect etc. to facilitate video chatting among the members. Video chats enable the team to interact through effective visual communication. They can pass visual cues through expression and see the person on the other side. Visual interaction makes your project more humane. Without any video communication, virtual team members are just like computers sitting at the two corners of the world. Cultivate a sense of global cultureVirtual employees are subject to different working environment like working alone from a remote place and interacting with culturally different people on a regular basis. The HR strategies need to include inter-cultural training as they are aligned towards fostering a global mindset among your virtual employees. A global mindset will prepare your employees to become diversity-friendly and be more flexible working with people belonging to a different time zone. If your business serves customers across the globe, then your employees need to realize so even if they are not directly dealing with them. Use screen sharing toolsConsidering the distance and lack of immediate expertise unavailable to employees, screen sharing technology has proven extremely helpful for virtual employees. The person on the other computer can take charge of what you are doing

Virtual employees work remotely for your company irrespective of time, space and organizational boundary. As an increasing number of companies are heading towards online business and outsourcing their critical tasks to save cost, hiring virtual employees makes a lot of sense for your company. The case for hiring virtual employees Efficient virtual employees help you to improve productivity through their specific skill sets and efficient use of time. They bring in a better line of communication in the company as they, being external forces, are unaffected by on-going monotonous communication. Besides that, they help you to make well-informed decisions by bringing in a new thought and an unbiased perspective. But hiring virtual employees becomes a challenge, especially, when you are new to this field. Lack of trust and transparency in approach creates hurdles for your business. As a business owner, you need to follow a well-informed course to hire productive virtual employees. We have listed 9 crucial steps to hire efficient virtual employees: 1. Figure out the implications of hiring a virtual employee Despite its advantages, virtual employees are associated with hard facts that can’t be overlooked. Taking this into account, a virtual employee needs to be prepared for a rapidly changing work environment. Physical distance can often de-motivate employees, owing to lack of face-to-face contact. Virtual employees face the challenge of building informal relationship with their counterparts that limits their growth and causes insecurity. Conflict management, expressing opinions and making decision become exigent for virtual team members. Another significant aspect is the work-life and personal-life imbalance. Most of the virtual employees work from home; so, it is likely to affect their personal life. Following a balanced routine is essential to maintain stability at work. As a leader of the team, it is essential to select workers who realize these challenges and respect the spirit of the work. 2. Make sure the applicant is well-equipped Virtual employees work through telecommuting with internet as their basic resource. Hiring virtual employees means your workers need to be well-equipped at their place of working. Your investment on hardware and software needs to be very limited, if any. A virtual employee needs to be well-aware of the latest technology/tools and geared-up to use it. For instance, document storage tools like DropBox, BaseCamp, Google Drive, Box and SkyDrive help to securely save your work files. Project management tools like Microsoft Project, Primavera, Apollo, Redmine, Asana and Jira help to manage task & schedule assignments. Besides that, there are collaboration tools to smoothen the workflow. Meeting tools, video-conferencing tools, social-networking tools and instant messaging tools are necessary for experiencing an unobstructed working relationship within the team members & with the head office. 3. Have an explicit hiring goal Most of the companies just run towards hiring virtual employees in order to save administration expenses. If you are hiring for the same reason, then you need to understand that even virtual employees carry hidden costs of inadequate communication and lack of transparency in workflow; though, many of these issues are being resolved through best practices and tools. Conduct a thorough review of the job profile you are seeking to fill. Analyze the working environment and challenges to be faced by your employees. How does the virtual job help your organization? Is it a permanent or a temporary profile? Does it contribute towards productivity, innovation or efficiency in your organization? Answering these basic questions will give you a clear picture for hiring needs. 4. Participate in the hiring process Most of the times, you hire a staffing agency to do this job for you. But don’t forget the critical nature of the profile you are seeking to fill. Participation in the hiring process saves you from the future woes faced by your company, wherein, you unknowingly hire an incompetent or unsuitable person. It also ensures interaction between you and the candidate for better understanding of mutual goals & clarity of the job profile. Ask your hiring agency to keep you in the loop during the entire hiring process. If the agency resists doing so, then you ask them to shortlist two candidates on the basis of your requirement. Conduct the final interview yourself. Have the final say in selecting the candidate. 5. Applicant needs to be self-motivated with adequate soft skills Start-up companies are often strapped for money and talent. Virtual work environment requires the employees to work independently from a remote location. In such a situation, physical monitoring of tasks and their progress is impossible. Virtual employees need to possess qualities like self-discipline, self-motivation and time management. It is practically impossible for you to discover problems faced by your employee. Virtual employees need to be quick enough to resolve their issues themselves; and if they are unable to do so, they need to communicate the same to you without delay. At any expense, workflow need not suffer. Also, check references provided by the candidate to know their job history and their ability to work in remote environment. 6. Focus on specific skill set than multi-talented candidates Hiring a virtual employee opens you to a vast talent of highly-skilled workers working remotely. Many a times, candidates try to highlight skills other than the desired skill set. This overshadows your purpose and you end up hiring a wrong candidate. While interviewing a candidate, highlight the specific skill set you are looking for the job. If need be, conduct a test to judge their skills. Ask them to demonstrate their previous verified work to know their capabilities. This is important, especially, when the job is highly technical in nature like a programmer, web designer or application developer. Furthermore, to be an efficient worker, it is necessary to follow the deadlines. Make sure they are ready to push against time to keep your customers happy. 7. Seek advice from hiring agency If you are a start-up company, it is quite possible that you are completely unaware of the hiring process. Even the online articles don’t seem to help you. Do

An offshore development center is a team of highly skilled professionals, usually, web developers and programmers working for your company located at an offshore destination. It is a dedicated team that works solely for your project as per your instructions. Unlike offshoring, you have a greater control over these development centers as you have a right to specify the hardware and software to be used in order to maintain same quality standards as in your in-house team. Offshore development centers are established on the grounds of relationship, trust, compatibility and shared goals between two companies. Salient features of an offshore development center Provide 24×7 administration Highly skilled professionals with a right set of expertise available cheaply Resilient to suit your needs Ready to invest in research and development Provide testing and quality assurance services Invest in new technologies Provide maintenance and support Dedicated online communication and collaboration with your in-house team Provide consultation and study requirements Conduct data analysis and modeling How is it different from in-house team? Offshore development center offers a hybrid model of development that works in collaboration with your in-house development team. In case, you don’t have an in-house team, you can still have a dedicated offshore development center. Usually, many start-up companies prefer to operate only through offshore development centers by hiring expertise at a cheap rate. Moreover, they help the start-up companies to keep their budget in control and deliver the project on time. They even offer a flexibility of small scale organizations so they are always prepared to accept changes and challenges. Many Asian countries like China, India, Philippines, and Vietnam serve as an excellent offshore destination for its US-based clients. On the contrary, in-house development teams find it difficult to keep the budgets in control owing to high risk factor involved. Continuous technology upgrades and changing business-user requirements make it unviable for start-up companies to invest in in-house development teams. Though being under your direct supervision, in-house teams are capable enough to deliver high quality product for your clients. In-house teams work directly with you and understand your business closely but they are marred by constant distractions. The result is they lose time and increase your cost of production; and not to overlook, the salaries paid to in-house team members is very high as compared to that in offshore development centers. Benefits of offshore development center Increase productivity – You need to invest a lot of time, money and energy to lead your inexperienced in-house developers’ team to success. As a start-up company, you don’t afford that leverage of spending lavishly. Offshoring allows restructuring your in-house resources, thereby, increasing the overall productivity; and your partners in offshore development centers have a vast experience in the industry with tried & tested models of operation. They quickly sense your business requirement to deliver the best possible product. Encourage seamless co-ordination between your in-house team and the offshore development center to get maximum output. Reduce operational expenses – As you are aware, technology involved in IT/ITES industry changes rapidly, it becomes practically impossible for you to micro-manage it. Moreover, it starts affecting your core business operations. Relocating suitable roles to offshore development centers helps you to significantly reduce operational cost. Besides hiring a highly productive workforce, you save on infrastructural investment in office space and administrative expenses. As a result, you need to invest a lot of money into buying licensed software and compatible hardware. Added to that, employees need continuous training on the updated technology, which incurs an extra cost. As an offshore development center can utilize the same equipment and software for other clients after your project is over, it is easier for them to achieve faster return on investment. Leverage offshore talent- A leader can obtain maximum output from his followers, when he is aware of their potential. There is a plenty of talent available in the development centers. They are professionals with superior knowledge and a creative mind-set. Moreover, being located in the developing world, their aspiration level is quite high and they are willing to give their best output provided they get a favorable environment for working. Make sure that your partner invests appropriate energy in retaining talent. Share this knowledge with your in-house team to facilitate better collaboration. Greater visibility and predictability in the development process – Offshore development centers with their vast experience are able to look into the project through a different perspective. A new perspective gives you an opportunity to differentiate your services from the clutter.  Furthermore, we have seen that risk factor involved in IT projects is quite high due to highly volatile market conditions. Development centers assist you in taking calculated risks involved in project failures so that it is not the end of the road for your business. Used as a market entry strategy or to increase presence in a market – Offshore development centers are often established with the idea of exploring a new market. They allow you to study the local environment including clients’ requirements, Government support, labor market and availability of talent. It helps you to gain experience in a new market so that you can take strategic decisions related to expansion.  On the other hand, it is quite possible that your efforts to succeed in offshore market have yielded limited results through in-house team. Offshore development center makes it easier for you to increase your presence there. Local presence increases confidence of your clients and they are willing to invest in your services. Use global resources and offshore talent to meet time-bound objectives – Risks associated with offshore development center While there are numerous benefits with developing an offshore center, it involves certain risk factors. It is the responsibility of the team leader to mitigate these risks by intervening and developing favorable environment. Cultural differences – The problem with cultural difference is communication. People from two different cultures find it difficult to relate and devise a common style of communication. It often leads to frustration and confusion, which hampers the

What is a virtual team? A virtual team is a group of employees located remotely away from each other working towards a common business goal. The trend of setting up a virtual team is growing exponentially among both small and large companies who want to offset the higher cost of office infrastructure overheads, improve business processes, penetrate new markets without compromising on the quality of work & providing easier way of life for employees by hiring the best talent available remotely. Despite its benefits, creating a virtual team for the business can be a challenging task for a new player. Virtual environment has its own limitations, which can be conquered with experience and training the team. Virtual team challenges Team members belong to different cultural backgrounds and time zones Recording every little task online consumes extra time Tracking WIP and recognizing efforts in a virtual environment is a different ballgame Team members have to adapt to different modes of communication and collaboration to avoid confusion Building trust among team members is a major challenge owing to limited or no face-to-face interaction Overcoming isolation and feelings of detachment Before you step out to form a virtual team for your business, make sure you pick the right job that can be virtualized. Not every job is suitable for virtual environment as the demands of a particular job profile vary. Profiles like web designer, graphic designer or application developer are best suitable for this environment as they involve solo working for prolonged hours barring distraction. 5 easy steps to create a successful virtual team Forming a team Start with a small team to understand the functioning and facilitate better co-ordination. Rather prefer to keep your team short as communication challenges grow exponentially with the increase in size of the team. Target people who have already worked in a home-based job. Providing a home-based job becomes your bargaining power. If you have an existing in-house team, then you can pick and choose members who are fit & willing to work in a virtual environment. Existing team members who require little management or guidance to accomplish their tasks, are the ones you need to target. The advantage of using them is that they already know your business requirements and you save time & cost in managing them in a virtual environment. A team with members performing different functions like finance, operations, HR & IT often makes the structure complex causing accountability issues. Establish a clear line of accountability in a cross-functional virtual team. Select the members with a balance of interpersonal and technical skills. Personality traits considered essential for every virtual team member are self-sufficiency, ability to handle negative feedback better than collocated teams, excellent communication skills, no personality conflicts, no information hoarding and flexibility in approach. Establish communication protocol Communication has to be quick and effective so that there is no obstruction in the work due to lack of communication. Establish a communication protocol in which you only pull the required team members for discussion or video conference. Unnecessarily involving every team member makes your team unproductive and de-focused. Though every team member has to be hyper-active in communication, mark out the members who will address a respective concern and become a source of origin for higher level communication involving a selected group of individuals. Record all the online meetings for future reference. They also help you to resolve conflicts. There are many tools that help the team to communicate and collaborate effectively. Video conferencing tools include Google+ Hangout, Skype, iChat, ooVoo, AT&T Connect etc. Collaboration tools like Redmine, Basecamp, join.me, Dropbox, Google Drive etc. prove extremely helpful for virtual teams. You can also seek the help of virtual assistants who readily provide assistance on administrative, technical and creative issues operating remotely from their home. Building trust among team members requires quick responses to electronic messages and rapid follow-up. Team members form an image of predictable performance based upon communication efficiency of others. Train the team members Virtual work environment is drastically different from in-house office environment. Virtual team members need periodic training to build new skills in collaboration, managing virtual meetings, problem-solving, decision-making and developing customized operating norms. It is common to see that a team member excels at his expertise and is critical to the success of your project but finds communication with the group a major challenge. In other cases, you will find that the individual is a good communicator in an office set-up with adequate leadership skills but gets uncomfortable in maintaining this leadership through social media tools. The HR department of your company needs to identify these skill gaps and devise appropriate training sessions to plug them. Training need not only be provided on the use of communication tools but also on when to use them and whom to engage with. Well-trained teams help to overcome process losses because they are unaffected by personality conflicts, office gossips, politics, stereotypes owing to minimum face-to-face contact etc. Training also helps team members to stay away from conflicts arising from religious and ethnical diversity. Besides that, it is important to conduct sessions on self-motivation and inspiration to maintain a positive environment free from stress. Define roles and responsibilities In office environment, roles and responsibilities are often shared in a team, depending upon the hierarchy, situation and mutual understanding but there is no such case in a virtual environment. To build strong and long-lasting relationship among team members, it is essential to have clearly defined roles. Role co-ordination holds a lot of significance in a virtual team as there are many interdependent tasks. Virtual teams relatively encompass a flatter structure with loose-ended reporting levels. As a business owner, you need to clearly define the specific roles of remotely sitting individuals to avoid confusion and conflicts. Create an online directory that clearly documents the role and responsibility of every team member. The responsibilities need to be divided in such a manner that the team, as a whole, produces maximum result by exploiting the

In the last few years, we have seen cloud computing invading offices, homes and corporations. It is becoming increasingly important to pay attention to how quickly cloud will take over in-house infrastructure. The possibility of cloud based IT outsourcing taking over in-house IT infrastructure might happen as soon as 2015 according to a research study. Cloud is only going to get bigger More than 35% of IT outsourcing is now over the cloud and it is expected to cross 50% by 2015 according to SAVVIS, a CenturyLink company. By 2018, the report estimates that cloud will take over more than 70% of IT infrastructures and resources. There are several reasons for this trend. First of all, cloud reduces costs and then it improves quality, helps people to be flexible, gives access to improved technology and also reduces administrative time. With all these benefits in place, we see no reason why people must not begin to adopt cloud computing as soon as possible. Corporate companies were hesitant to adopt cloud technology initially but that situation has reversed. In fact, cloud computing has grown so aggressively that most outsourcing companies exist today because of clued computing. Here are 5 ways in which cloud based IT outsourcing is superior to in-house IT infrastructures. Cloud reduces costs It is no secret that cloud computing is all about money. It helps companies to reduce costs and ensure that a lot of that money is spent on something more useful. This alone is enough for us to recommend cloud computing. Cost reduction is hugely important today as companies simply do not have the money to invest in legacy systems and to engage in IT development themselves. Using cloud based IT outsourcing helps such companies to reduce costs. Improves quality of work As cloud reduces cost, it indirectly increases the quality of work that is finished. The outsourcing agencies have much money to gain from increased workflow and the client companies have an added advantage of getting rid of IT development tasks that proved too difficult to manage. At the end of the day, it is a win-win situation that helps people to save time, money and engage in work. Increases flexibility As cloud computing is carried in the cloud, it greatly increases flexibility. Employees will no longer need to visit offices everyday and login to legacy systems. They can work from anywhere that has a connection to the Internet. This is one of the reasons why outsourcing has been growing by leaps and bounds. Increased flexibility also means companies have more freedom to engage in activities that they previously couldn’t. Access to good technology More and more companies are beginning to enjoy the luxury of using cutting-edge technologies, thanks to cloud computing. It is impossible to gain access to cutting-edge technologies unless they are available over the cloud. It reduces costs and is a more democratic way of working with technology. Even smaller companies that cannot gain access to expensive software programs can use cloud based software programs. Reduction of administrative time Cloud computing automates a lot of things and reduces the need to administrate IT activities. It helps companies to ensure that they do not need to be always monitoring IT activities. Cloud computing takes care of IT activities that previously needed to be taken care of by in-house IT professionals. It has led to a situation where companies are now more willing to send work to people elsewhere in the cloud rather than taking up all the IT related work themselves in in-house infrastructure. Storage, hosting and everything else that previously needed to be housed at a location can now be hired on the cloud. One of the main reasons why cloud computing is becoming increasingly accepted is because high speed internet connections are making in-roads even in poorer countries. India now boasts of very high speed connections and this helps outsourcing companies to provide cloud solutions with ease; something that they previously were not able to do. Changing times and changing technology has helped companies in countries like India to offer cheaper services in the cloud. Companies in the U.S. or in the U.K. will no longer need to house their IT infrastructure within their own offices. Almost everything can be outsourced over the cloud.

India is burgeoning economy that has only grown to become ever more important domestically and internationally. The country might have its economic woes but the fact that large number of people now fall into the middle income group is proof enough for the hypothesis that Indians have a larger buying capacity today than yesterday. The outsourcing story as it happened in India Much of India’s growth happened after the economic liberalization took place in 1990. Soon enough, companies began to sprout and took up outsourcing tasks that helped India to become one of the leaders of IT outsourcing. Access to cheap labor, English language speaking skills and good technical education has helped India to metamorphose into an economic giant. While American and British companies have continued to outsource to India, a new phenomenon can now be observed. Indian companies have begun to outsource domestically, whether it is IT, BPO or something else. As Indian companies have begun to become more successful, they are now able to outsource their own tasks to other Indians who can work to a lower cost and thereby, reduce overall costs. This has helped Indian IT companies to focus on their core areas, which is IT development. There are several reasons why domestic outsourcing is going to get even bigger in India. Here we shall list a few reasons: Large cities in India are getting expensive As Indian cities are getting overpopulated, they are also becoming ever more expensive. Cities like Bangalore, New Delhi and Bombay are some of the most expensive cities in the region. The cost of living has increased and employees need to be paid more. Hiring employees who live in the hinterland but have had a good education is proving to be a better idea than making people work at offices that are located in larger cities. Thus, domestic outsourcing is taking place this way. Indian BPO industry As more Indians continue to purchase, the trend of domestic BPOs have increased too. More companies are sprouting and their customers need contact centers to reach the companies. These companies outsource their customer service tasks to BPOs located within the country. Customer service is usually provided in English, Hindi and other Indian languages. Increased awareness about IT More and more companies have begun to understand the importance of IT and web development. Consequently, companies have begun to outsource IT related tasks to people located within India. This is also one of the reasons why websites are becoming increasingly popular in India. Indian companies have finally begun to understand the importance of having a website, many years after their counterparts in the U.S. and U.K. did. Outsourcing is getting easier More companies are now open to the idea of outsourcing their tasks to other Indian companies. While this was not the trend a few years ago, it certainly is today. Even legally, it is easier to send tasks to other companies in India than it used to be earlier. Bureaucratic issues have begun to be resolved and there is less red tape, which is one of the reasons why companies have begun to outsource domestically ever so often. Increasing profits for IT companies IT companies have consistently been profitable in spite of global recession a few years ago. All the profit has been utilized to expand business and create even more wealth. This wealth creation has helped Indian companies to widen their own core areas of focus, resulting in a situation where they can outsource simple and medium level tasks to other smaller companies within India. India’s outsourcing story is not one-sided but has come to be a way of life. Indian companies are open to outsourcing their own tasks to other companies and there are a number of companies that are willing to take up these tasks. One of the reasons why companies have begun to succeed is because they can outsource their tasks without having to worry about less important tasks. Thus, the growing areas for domestic outsourcing include IT, web designing, HR, customer service and a whole lot of other tasks. In the future, we expect Indian companies to become even more amenable to outsourcing than ever before.

We all know that outsourcing work to another company can bring about great results, cut costs and increase productivity in the long run. It helps us to focus on our core business activities instead of wasting time on things that we are not really good at. In fact, companies have been outsourcing work to other professionals from times immemorial. A blacksmith always tried to outsource the procurement of metal to someone else. That someone else was an outsourcing agent. Outsourcing is growing ever more important Today, it is a lot more sophisticated than that and there are clear legal & professional boundaries about what is outsourced, how it is outsourced and to whom. While all this sounds nice and attractive, people still do not understand the differences between the 3 confusing terms: outsourcing, offshoring and nearshore outsourcing. All three words are related to each other but are quite different from each other. In order to have a successful outsourcing process, we need to understand all three terms and make sure that we are not going wrong anywhere. It also helps to read up on the latest outsourcing techniques, tips and strategies. One of the best ways is to understand the differences between these three terms. Outsourcing vs. Offshoring Let us briefly take a look at what the three terms mean, with a case study as an example. Company X provides software maintenance services and has a huge office in San Francisco, California. The company has become increasingly busy and is not able to code or maintain the software programs of all its clients. Thus, it likes to get rid of a few of its responsibilities at a fraction of the cost. 6 months ago, it had hired 2 HR managers and a taxation officer, all of which increased the company’s expenditure. Tax experts in the U.S. cost a lot and H.R. managers with an MBA do not come cheap. It contacted another entity called Company Y, which agreed to take up the taxation responsibilities. Company Y is located in San Diego. Company X was still not satisfied with paying a lot of fees to its HR managers and decided to seek help from Company Z, located in New Delhi, India. Company Z is an expert at providing HR services to its clients. Indian MBA degree holders charge only a fraction of what their American counterparts do because the cost of living and education are both less when compared with the U.S. If we look at the above example, Company X clearly was overburdened and was not able to focus on its core business activity, which was to engage in software maintenance. It decided to outsource its taxation and HR responsibilities to other companies which are good at it. It outsourced the taxation tasks to Company Y and it ‘offshored’ its HR responsibilities to Company Z in New Delhi. When a company transfers certain tasks to a different company in order to save costs, gain expertise and focus on core business activities, it is called outsourcing. When the act of outsourcing happens offshore in a different country, it is called offshoring. Offshoring is when outsourcing takes place internationally. Contrary to what most people believe, outsourcing takes place mostly within a single country. Offshoring, on the other hand, is when outsourcing takes place across international borders, in order to save money, gain expertise and other benefits. Nearshore outsourcing: What the noise is all about Now let us assume Company Z often require new recruits in Company X to contact them. There is a huge time difference between San Francisco and New Delhi. Thus, Company X decides to outsource some of the HR responsibilities like making the initial contact with recruits to an entity, Company M, located in Buenos Aires, Argentina. Company M, which is located in Buenos Aires is very far from San Francisco but the time differences are not much. The process of sending work to a country that is not very different in working style, time zone or culture is called nearshoring. Thus, in this case, in order to beat the time difference, Company X transferred some of the tasks from Company Z to Company M, which is located in a nearshore location, in Buenos Aires. Nearshore activities are offshore activities that take place in countries that are similar in time zones, culture and working styles. What is reshoring There is also another term that many people do not understand. It is called reshoring. Reshoring is a term that is used to describe the process of bringing certain tasks back to the home country, for a number of reasons. This might be political, economic, professional or just about anything. If we should consider the case above, Company X suddenly received a notice from its directors that Argentina was going through an emergency because of political turmoil. Company M was shut down indefinitely in order to avoid protests on the streets. Company X then decided to temporarily outsource that part of HR tasks to another company in San Francisco, Company P. Tasks that were previously nearshored to Company M were restored to Company P. Offshoring vs. Nearshore Outsourcing: Which is better Offshoring technically means outsourcing work to a company that is located in a different country. Nearshore outsourcing refers to the act of offshore outsourcing work to a country that is closer in time zones, similar in terms of working style and not too different culturally. There are several benefits and disadvantages to both. Let us take the example of the U.S. and the U.K. When an American or British company wants to hire IT professionals, they usually seek Indian or Filipino professionals. This is mostly because IT professionals in India are cheaper to hire, have a better education and speak at least a decent level of English. American and British companies pay only a fraction of what they would have paid, had they hired professionals from their own countries. It is also possible that their own professionals are not