Choosing an exotic Holiday Destination and Planning one is part of a specialized service. You have travel experts exploring where you can stay, the nearest and cheapest transport routes, destinations to visit and the time span it would take to cover a country. The entire management without you having to interact with the locals asking them for directions. Organizations providing IT solutions are almost the same, they engage with the local talent, employ the best they can find and indulge them in your services as per your requirement (to put is very simply).
Gradually all industry verticals are indulging in outsourcing in one way or the other. Gone are the days when Companies were skeptical about whether an outsourcing model would gel with their business; rather countries have been in a competition for outsourcing supremacy in the past two decades. Outsourcing is not just a norm in the Technology industry rather is prevalent through other domains like manufacturing, textile, healthcare etc.
China, India and Singapore have been in the forefront of the Technology outsourcing service, mainly because of their affordability and top-grade talent and solutions. Before a Business arrives at the decision to outsource a section of their services or product, there are quite a few rationales that propel them in this direction. What are the common reasons due to which Organizations opt for outsourcing ?
- Increasing cost
The legally decided bare minimum cost of hiring an employee in the US is 7.25$ per hour on an average. The employees must further have a health coverage plan facilitated by the hiring organization. Even though large organizations have such costs aligned in their accounts; technology is mostly considered as an addon service. Infrastructure is the second most important investment involved in a business. To lease a workplace, hire/buy servers, machines and facilities add to the operational costs which organizations would like to avoid.
- Recruit IT Professionals
Most organizations working in varying domains lack the expertise to assess candidates that would appropriate in fulfilling their projected needs. They may have to count on a Hiring agency to do this job for them, which further extends the added costs.
- More time to focus on your Business
If your core business is selling Holiday Cards, you wouldn’t like to divert your time analyzing what framework, database or platform is to be invested in to host your website. Outsourcing development and support services leaves you with more time to attend to your core business.
- Global knowledge base
It is mandatory that companies seeking automation be cognizant with the latest technologies, market trends and solutions that are at one’s disposal to solve their niche problems; but that is ideally not the case. IT solutioning companies have experts with extensive knowledge about the evolution in technology and keep pace with the Global trends.
Several countries have cropped up with IT outsourcing centers, which endorse cheap and reliable services. Do you go for the most inexpensive, that which is Culturally adjacent, the most Technically advanced or the one that is the most Welcoming and Cooperative? It is not an easy task to conclude.
Since the IT revolution, most Asian countries like India, China and Philippines have dominated the outsourcing market. They have progressively evolved to absorb the necessities of the core businesses of individual countries and which business models work for each of them. Having said that, lately a few 2nd world countries are flourishing in the IT outsourcing sector and they are gaining popularity too. Croatia, Brazil and Ukraine are few of the upcoming IT solutioning avenues.
Based on your expectations from an Outsourcing Partner, one can judge which regions over the globe would be APT for outsourcing your business needs.
The primary evaluation of any firm would be the number of years of experience they have in IT development. India and China are considered the initial bloomers in the IT outsourcing business, followed by Thailand, Malaysia and Brazil.
Case-studies provide you with indicators regarding the Technologies they have worked with, the Experience they have with similar businesses and the clients they have catered to, who can be used as References. Interacting with individuals within your industry vertical can give you a gist of how their experience was with these providers. As Manufacturing processes, CRM workflows, HR policies Finance and Taxation policies drastically change over borders, It is a necessity to know whether they have any prior experience working with Businesses from your region.
Financial stability not only provides you with the progress of the IT solutioning firm over the past years, but also gives you a view into the growth the country has to offer. The Economic Stability of the Entire country should be taken into consideration while establishing future bonds with it. Following the post dissolution of the Soviet Union, USSR went through a major financial crisis in 1998; most countries are still recovering from it. Argentina faced a great depression from 1998 to 2002. A GDP decline of more than 26% was recorded in Greece and Ukraine faced an economic crisis in 2008.
Communication is the central focus of Cultural compatibility. Going beyond language it addresses whether the outsourcing partner would be able to understand your business, your work culture, and your regional policies. English is catching up as the most commonly used languages; India has the highest population of individuals speaking English (after the US) of 125,344,737. Many organizations groom their employees to be Globally Compatible rather than targeted only to one section of the Globe. It includes knowing the current state of affairs of host countries, gaining insight into their business methodologies and soft skills training.
Intellectual Property Laws
Which Intellectual property laws and for which type of assets, does the country you are outsourcing to operate on ? is an important query you should have the answer to. Legislative policies backing these Laws help expedite dispute resolutions in case of issues. After a breach, it is necessary to reach a verdict early, before further harm is done to the organization.
Standards of the development processes followed define the Quality of SW delivered. The maturity level of the delivery processes an organization follows is judged by CMMI, a globally accepted Model for process evaluation. International Organization for Standardization is working on creating and reevaluating standards to define the quality of delivery. The Top 5 countries with the highest amount of ISO/IEC 27001 – IT Security Techniques certifications for 2017 are Japan-9161, China-5069, UK-4503 ,India-3272, US-1517.
Business Continuity Management
The number of remote locations over which the partner facilities are distributed help with the BCM. The quality of facilities and the disaster recovery plans in place help assess the interruption that a business can face and recover from. The more distributed the services the faster the chances of recovery. Knowing how susceptible to natural calamities the locations are keeps us prepared for temporary outages.
Most countries having high minimum wage guidelines and health insurance plans to be facilitated by the employer, refrain from having resources onboard before any projects are available in hand. Most of them absorb freelancers to work on projects on a need basis. This kind of arrangement might be unfavorable in the long run and could result in delayed deliveries, low quality support, no stringent deadlines and lack of dedication of the employees either to the project or towards the organization.
Having a local presence in your region helps providing reassurance and streamlining interactions with the offshore teams. Hence it is beneficial if they have a POC or an office in your region.
Many countries on the verge of an economic crisis typically are also undergoing social and political revolutions which induces a sense of instability within the citizens. Even though these agitations might be limited to specific regions the overall effect of the insecurity reflects on the quality of work delivered. Hence it is important take an overview of the current socio-political state of the region you are seeing as your partner.
Irrespective of the region you choose it is always sensible to start small. Allocate a modest project to the decided firm for your primary evaluation. As you go ahead you can rethink over whether you want to scale up your contract. Breaking into new ventures does involve a considerable amount of Risk as well as Rewards associated with it. Having a tactical vision will help you overcome the drawbacks (if you face any) from the outsourcing partner.
We encourage you to try out Clarion’s unique engagement model - vEmployee which helps you leverage the best of outsourcing world while retaining complete control over your project. We provide you with a team of developers that start working on your projects as per your specifications. Our offerings are provided to you on a Pay-as-you-go model. We do not indulge in freelancers or freshers; all our employees are experienced individuals on our payroll.
For further details on the forthcoming new age outsourcing models that could provide you with extended flexibility you can get in touch with us and our team of experts will reach out to you.