Offshore Outsourcing

From humble beginning as a mere cost-cutting concept, offshore outsourcing has gradually moved ahead and established itself as a successful business model by rendering not only cost-effective but also sophisticated and highly efficient quality services. According to International Data Corporation (IDC), US-based companies will triple their offshore outsourcing spending from $5.5 billion in 2000 to more than $17.6 billion in 2005! The offshore outsourcing trend has crossed all the barriers of political turmoil, language and culture difference and has proved that no matter in which part of the world your service provider resides, what really matters is industry-standard, high-quality service together with decisive cost-advantage. But for quality and on-time delivery of offshore outsourcing services to a client, the offshore outsourcing service provider has been dependent on numerous delivery models that have evolved since the lastone-decade. A few of them are:

 Global Delivery Model

The distribution of activities across the various delivery models may vary from one project to another. This may be attributed to factors such as effort involved, level of interaction, cultural and time-zone differences. Some offshore outsourcing projects like migration and re-engineering can be executed totally on the offshore location, but others like enterprise application integration-related projects and demand almost a cent per cent execution on onsite location. This article will give an overview of the different kinds of offshore outsourcing delivery models followed by service providers the world over. It tries to give a general definition of the different offshore outsourcing models and has listed the benefits of each one of them while trying to portray a picture of actual distribution of activities at different locations.

Successful Outsourcing Model
Offsite/Offshore Outsourcing Model

The Offsite/Offshore outsourcing model provides exceptional value to clients. In this outsourcing model, the service provider will have its office close to the client's location and offshore outsourcing facilities at some other geographical region, which enables seamless transition and execution of projects without compromising quality and control for client management. The offsite outsourcing facility serves as a medium of communication between the client and the offshore outsourcing development team. Both the offsite and offshore outsourcing facility are well connected with highly secured network facilities for seamless communication with the respective client. This connectivity set up ensures failure-free, fast and secure access for the client to monitor the progress of development and support activity at both the offsite and offshore outsourcing locations.

This model also has an efficient backup facility for regular project backups and disaster recovery procedures. Generally, the distribution of work between the two outsourcing facilities is as follows:

Offsite outsourcing:
 Feasibility Study
 Requirement Gathering & Analysis
 Project Management Planning
 Acceptance Testing
Offshore outsourcing:
 Detailed Design
 System Testing
 Quality Assurance
 Support & Maintenance
 Follow-up Activities
Onsite/Offshore Outsourcing Model
This outsourcing model, which is also known as the Hybrid outsourcing model, has made an excellent repertoire in the offshore business process-outsourcing world. It has established itself as the most successful and the most popular among the various outsourcing models that have emerged so far. The secret of its success can be attributed to the fact that this outsourcing model gives an opportunity to the client to make direct communication with the service provider through the onsite center and at the same time gives them the chance of enjoying the benefits of offshore outsourcing. Ideally 20-30% of work is done onsite whereas 70-80% is outsourced offshore depending upon the criticality of the project. Usually, Requirement Analysis, Development of Detailed Specifications, Critical Support and Implementation are done onsite, while Development and Testing are outsourced offshore. Thus, the whole gamut of benefits for such outsourcing can be summarized as:
 Cost-effective in terms of time, money & communication
 Faster, better and easier
 24x7 work cycles
 Availability of multiple skill-sets
 Low cost for resources
 On-time and high quality service
 High security set-up
 Direct interaction with clients
Hence, under this outsourcing model, the distribution of activities is as follows: Onsite:
 Initial Study
 Requirement Analysis
 Project Management Planning
 High-Level Design
 Client Acceptance Testing
 Knowledge Transfer
 Detailed Design
 Milestone-based Development
 Integration Testing
 Application Management
Global Delivery Outsourcing Model

For better comfort of the outsourcing client, to address risks, this of outsourcing model is adopted to adjust to fast delivery of client requirements. The outsourcing service provider ensures a well-planned mechanism under which the outsourcing project resources are distributed physically at multiple locations. This kind of outsourcing methodology ensures:

 Low cost benefits
 High quality outsourcing service
 Resilient to disasters
 24x7 support
 Lower outsourcing project risk
 Improved delivery time
 High security set up

This outsourcing delivery model aims to productively spread out and manage engagements and resources across multiple global locations allowing the service provider to better respond to dynamic client requirements around the globe at unsurpassed levels of speed, quality and value.

The biggest advantage of this outsourcing model is that it saves the client from investing in a huge team of professionals. It conveniently adapts to the client's changing requirements and if there is a sudden need for a huge team, the outsourcing service provider can at once supply them to the client and later relocate them to other locations conveniently. The global delivery outsourcing model is the appropriate mix of onsite and offshore outsourcing delivery modes that results in quicker deliveries, improved end-user requirements, and excellent cost-effectiveness. Moreover, if any disaster strikes in any one of the locations, the outsourcing service provider can immediately pull up resources from other locations so that there is no interruption in business process. The distribution of outsourcing activities across the onsite and offshore locations may vary according to the demands of the project. Ideally, the activities that are exected onsite are:
 Initial Study/Project requirements
 High-level Design
 Maintenance and Support
 Some of the activities that are executed at offshore locations include:
 Project Analysis/Research
 Technology Assessment
 Detail Design and build
 Replication of client IT Infrastructure
 Technical Support
 Operations Support
The global delivery model has the ability to quickly respond to changing requirements of outsourcing clients due to the multiple onsite and offshore centers. If the project at any phase requires immediate attention, the onsite development centers allow for close interactions with the client and the subsequent workloads are shared/distributed among the onsite and offshore development centers.
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