Offshore Software Development Battlefield

In early years of this decade, companies had started realising the benefits of outsourcing the activities to the experts that provides them competitive advantage. With more and more companies outsourcing their software activities, the global market for offshored IT services and business processes has nearly tripled since 2001. In bid to take advantage of this fact, players are now diving in this industry.

Offshore software development has now become the battlefield with cutthroat competition. The existing players are making it difficult for new players to enter in custom software development market and new players, like new IT ventures and contries, are trying hard to get themselves identified as software service providers. In attempt to increase the market share, companies are shifting their focus towards local opportunities. To sustain current growth, the seasoned players are sorting out the options in new upcoming technologies like mobile.

As far as the two major software development countries in outsourcing, India and China, has the most of the global IT market share and cover the larger pie of offshore development market. Both these countries have thousands of IT companies that are offering many different types of development and other IT services. In both these countries the growth of Information Technology industry is remarkable. And both countries are competing closely with each other.

The software development market is becoming exceptionally competitive. Even though, India and China are considered as the competitive software service providers considering the quality of the service they provide, the new countries like Philippines, Russia and Nigeria are also preparing to make a dent in this market. The countries are making deliberate efforts to gain edge over English as deliverable.

The current market can not be dictated by lower prices alone but quality and service is forming the core in software development. The winner of the deal is now decided on the total offerings- cost, quality and service. To address the quality related issues more and more companies are turning towards ISO and CMMI to get certified themselves as quality providers.

The profit margin and profit earnings have made this market lucrative to enter and hence very competitive. Survey suggests that around 30% of the software companies do cover their investment and start earning profits within two years from commencement. Moreover, 40% to 45% of the companies are gaining higher than their investment withing short period. Still their are number of companies who have failed due to lower quality development services. Despite of this the market is moving upward with India becoming the hotspot for software development services.

Increased competition worldwide for IT services has made it tough for the companies to sustain their position and creating an entry barrier for the new entrants in offshore software development market.

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Author is MBA in e-Business and Marketing and is working currently with e-Zest Solutions as SEO.

Offshore Software Development India: Advantages and Disadvantages

Offshore software development is a kind of outsourcing in which the jobs of software development are transferred to offshore countries. Mainly companies in USA transfer software development job to India or other south Asian countries. In India there are many offshore development companies. In India offshore software development have some advantages and also some disadvantages.

Advantages of offshore software development in India

India is a densely populated country so the labor cost in India is too cheap. Along with the cheap labor Indian software professionals are so skilled and high mental level persons. This is the main reason that the US and Europe companies transfer their jobs in India. By offshoring their jobs the companies will save a lot of money. According to a market research normally US and Europe companies save around 70% of their software development cost through offshore software development. In US the average salary of software developer is $9000 per year. In India the salary of software developer is too less in comparison to US. In India generally there are no employment issues.

Disadvantages offshore software development in India

There also some disadvantages of offshore software development in India. Many outsourcing business fail due to these reasons. The main reason is business understanding. Normally new companies are unable to understand the process of offshore outsourcing and fails before grow. In case of web development outsourcing US companies found the Indian view of color co-ordination somewhat lurid.

Risks in offshore software development in India

1. Offshore software development industry in India is still new, young and largely unproven. However there are also lots of success stories which prove Indian offshoring is best.

2. Stability of the Offshore Countries is another risk. In India and other south Asian countries stability is less these countries are always involved in politic and religious activities. This will directly affect Indian economy. India is also relatively unstable. If we see on past two years back the riots in Chennai caused many lost days of development time and they also forced outsourcing. Some software firms to up and move from Chennai.

Before offshore outsourcing companies must ensure that the offshore software development companies have business continuity and disaster recovery plans. Or if not the offshore company should prepare for the eventuality of non-availability of their outsourcing partners.

The author is a Senior Search Engine Optimizer in an offshore software development company in India. The company deals in offshore software development and offshore outsourcing. For more information visit: http://www.otssolutions.com

Best Practices in Offshore Software Development

A Software Model that emphasizes on global delivery of quality software build by talented pool of professionals at an economical cost from a development center that is located in a foreign land is Offshore Software Development.

The burgeoning competition to be branded as the Quality Offshore Software Development Company has signaled the requirement to implement the best of the resources and innovative strategies. After a jerk of the start-up phase, HyTech Professionals has implemented the approach that encompasses the minutest details, which had been or may have been easily overlooked by the nascent businesses to win the client interest. Clearly, the enticing feature of Outsourcing is cost savings without compromising on quality. To achieve this objective, the initiative should begin with the Best possible approach by the offshore client and the Software vendor.

Huge cost savings, time optimization and talented technocrats in a minimal risk environment are often accompanied by some challenges such as communication gaps, decreased visibility to project status, unexpected spikes in budget allocation and cultural hindrances.

The opening channel to venture in Software Offshore Development is the Smooth flow of communication between the offshore client and the vendor. A constructive dialogue between the two sides is not limited to verbal communication, but is aggressively pursued in writing, meetings and conferences.

Seamless communication can be reinforced by working on a global clock, which is accomplished by implementing work-schedules with a time overlap between the software offshore client and the vendor. Though, it may be expected that the offshore vendor works in accordance with the client suitability. Local presence of the offshore vendor can be of an added privilege to the client, as it guarantees direct and constant interfacing. The flexibility and ease to approach the offshore vendor strengthens the client confidence.

Another factor that should be taken care of is the Budget forecast for the project. The Technical and Business Analysts should take into consideration the following:

• The vendor Rates: what is more suitable to the project requirement. Should the accepted rates be “Per Project”, “per Hour”, “per Month” etc?
• The Risks involved in accomplishing the task
• Is the quality being compromised for an attractive price?
• See through any hidden costs. For example: Change or modification in the Client specification, Re-doing of any deliverable.
• The Offshore Vendor Resource matrix that cover the attributes required by the Client

Once the offshore client is confident that the terms of engagement are clear, both the Teams coordinate the efforts and work on the project. The Engagement Model may be transparent to win the client interest and hence the one that adds value to the relationship.

To foster the nascent relation between the offshore client and the software vendor, it is imperative that the offshore vendor architects the design such that which ensures an uninterrupted work-flow. Implementing a development environment that is a replication of the offshore client environment serves as a conduit to smooth accomplishment of tasks.

Apart from setting up an extension of the Client backdrop, the teams engaged from either side should delegate their tasks through a single point of contact to eliminate any ambiguities that could arise due to multiple interfacing channels. All the tasks relayed between the Offshore and the Domestic teams should be anchored on close communication and active follow up.

How much ever one decides to implement an error-free design, some issues or unpredictable lags can reap up and slow down the work-process. Such issues if handled with a mutual consensus and cooperation from both the parties can ramp up the process to successfully achieve the target.

In conclusion, a summary of the steps for the best practice in Offshore Software Development are:

1. Implement a Transparent Model that is customer-centric
2. Conduct a proper survey to shortlist the best suitable vendor for the project
3. Finalize the contract that explicitly defines the Financial terms and states Service Level Agreement
4. Fragment the Software Lifecycle in phases- from Inception to Delivery
5. Develop and deploy the accomplished tasks in a close collaboration with the Offshore Client.

Source: http://www.hytechpro.com/best_practices_in_offshore_software_development.html

About The Author
John Parker
This article is powered by A-1 Technology, an offshore outsourcing company