Process, Process, Process. Outsourcing to India
A recent report in CIO magazine recounts a successful long term engagement of software offshore outsourincg in India. The use of cheaper labor in the developing world has been happening for years. However, offshore outsourcing is now becoming the standard for many North American companies. As more and more companies make use of this process, certain best practices are becoming established.
It's important to be clear on exactly what work can be outsourced to India. Companies should have a clearly defined process to evaluate the cost and benefits of such outsourcing. Key factors to consider are:
- Is the work strategic?
- Can the work be performed more cheaply in house?
Work that is strategic to a companies core business operations should not quickly be outsourced. There is a real danger in creating a hollow company if the direction of a company placed in the hands of another. Executives must take the time to analyze the importance of these projects. Outsourcing companies cannot be listened to blindly.
Additionally, the practice of multi-sourcing is recommended. Multi-sourcing means that a pool of qualified outsourcing providers is established early in the process of offshoring. When new projects arise, this pool can be called upon to provide bids for the project. This will ensure that no individual vendor has the power to take advantage of the relationship.
Finally, for companies that are constantly developing new applications, and maintaining older applications, huge cost savings can be found with dedicated offshore development centers. An offshore outsourcing relationship that incorporates the dedicated offshore development center concept retains key personal from project to project. This cuts down on startup costs for projects, and reduces errors in code maintenance.
Offshore outsourcing is quickly gaining acceptance in North America. As the practice is becoming more established, accepted practices are now becoming more widely known.
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