Offshore Outsourcing News & Articles

In today’s competitive business environment, small- and medium-sized businesses are often edged out by their larger counterparts. Until now, large multinational corporations enjoyed the advantage of having affordable resources spread out across the globe. Their use of offshore software development meant that they could get the custom software they needed at a fraction of the cost of utilizing in house employees. Times have changed, though, and now businesses of every size can regain the competitive edge by outsourcing software development.

As many executives can attest, however, shepherding projects through to completion using virtual teams can have both advantages and disadvantages. Here is an overview of both:

Benefits of Virtual Software Development Teams

There are several direct benefits of virtual teams. Because they are global in nature, you can take advantage of high degrees of expertise while paying much less than the prevailing wage. Since all parties come together for a single purpose, utilizing an offshore software development company also leads to shorter project durations and balanced team resources. Further, because the team members work from various locations, the risks are more evenly distributed.

There are also terrific intangible benefits to using virtual software development teams. You can have access to highly trained specialists who not only use their expertise to further your project, but who can also share their knowledge with others in your company. Your project can also conform to best practices by implementing quality standards. In addition, you gain the benefit of increased flexibility by having the ability to add team members as the project becomes more complex or labor intensive. This can lead to extremely agile software development.

Drawbacks of Virtual Software Development Teams

Virtual teams have unique characteristics. Unlike long-time staff members who work in the same office, the collaboration on virtual teams is temporary and usually limited to specific projects. This can be a benefit, since the team shares a vision and works toward the same goal, but it can also be a project’s downfall, since there may be no infrastructure in place to support quality control and intra-team communication. In addition, virtual team members often speak different languages and work in different time zones, which can make effective communication difficult. Cultural differences can translate into project delays when days of worship or national or regional holidays interfere with deadlines.

Overcoming Obstacles and Maximizing Benefits

While there are both advantages and disadvantages to outsourcing software development, the benefits ultimately outweigh the pitfalls. It’s not easy, however, to develop the know-how and management style to successfully supervise virtual teams. In order to do so, it’s helpful to look to an offshore software development company that specializes in distributed software development in virtual teams. Their consulting services and training courses can help you develop procedures to avoid problems and increase the effectiveness of your processes. They can also assist you in preparing your employees to become members of virtual teams as well as provide the technical infrastructure to ensure success.

BANGALORE, India (AFP) — India remains the favoured technology outsourcing destination, an industry report said Sunday, amid concerns a rising rupee and soaring wages would blunt the country’s competitive edge.

A study by industry publication Global Services and investment advisory firm Tholons put the Indian cities of Chennai, Hyderabad and Pune at the top of a list of 15 emerging outsourcing destinations for global companies.

Kolkata at number five and Chandigarh at number nine were the other two Indian locations on the list, which contained three Chinese and two Vietnamese cities as well.

The three hot cities for outsourcing from China were Shanghai at number eight, Beijing at 10 and Shenzhen at 13. Ho Chi Minh City and Hanoi were put at number six and number 12.

Cebu in the Philippines came in at number four, the Sri Lankan capital of Colombo at seven, Cairo at 11, Buenos Aires at 14 and Sao Paulo at 15, the study’s sponsors said in a statement released in Bangalore.

The list is based on criteria such as scale and quality of workforce, financial infrastructure, risk environment and quality of life.

But it does not include established outsourcing locations such as Bangalore, the New Delhi capital region, Manila, Mumbai and Dublin that have had a decade’s headstart.

Costs are surging in the prime cities in India, which has earned a reputation as the world’s back office, as property values and rentals rise and wages increase at an annual pace of more than 15 percent amid a shortage of skilled employees.

Indian outsourcing firms are also feeling the pinch from an appreciating rupee, which dents dollar-billed earnings, forcing them to cut costs by expanding to less expensive locations.

“With the demand-supply gap widening, newer tier II cities will play a critical role in re-engineered globalisation models,” said Tholons chairman Avinash Vashistha.

“Destinations will need to provide greater level of cost effectiveness and operational efficiency.”

India’s outsourcing companies have thrived by winning work from companies in the US and Europe that sought to tap the country’s low costs and large employee pool by handing over jobs ranging from answering customers’ calls to risk management and financial analysis.

Pure-play outsourcing firms account for about 10 percent of the 50 billion dollars in revenue logged in the year ended March by the entire information technology industry, which also includes software giants

The software maker has been quietly outsourcing its back office operations to service provider Accenture over the past several months, Accenture disclosed Thursday.

Microsoft is doing some internal house cleaning.The software maker has been quietly outsourcing its back office operations to service provider Accenture over the past several months, Accenture disclosed Thursday.

The two companies struck a seven-year deal earlier this year, Accenture said. Under the pact, worth $185 million, Accenture will handle a range of finance and accounting functions for Microsoft, including accounts payable and travel and expense management and general ledger maintenance.

Accenture also is providing Microsoft with a number of procurement services, including requisition-to-purchase order processing.

Microsoft chief accounting officer Frank Brod said in a statement that the companies are “a few months into the program.” Brod said he is “pleased with the progress and speed of the transition.”

Accenture did not specifically disclose the location from which it’s providing the services, but the company has been aggressively building up its footprint in India in order to tap the country’s army of low-cost, white-collar workers. Accenture will have more employees in India than in the U.S. by year’s end, company officials have stated.

Outsourcing to India allows businesses to cut back-office costs by anywhere from 15% to 40% experts say, although the rising rupee has been gnawing away at those savings of late.

To provide some of the services, Accenture is using Microsoft’s own Dynamics AX platform, a multi-language, multi-currency ERP system that automates routine business functions.

Separately, Microsoft on Wednesday said it has boosted the quarterly dividend on its shares by a penny to $0.11 per share. The dividend is payable on December 13, 2007, to shareholders of record on November 15.

Microsoft has consistently raised its dividend over the past several years in one penny increments. In early trading Thursday, Microsoft shares were up slightly to $29.01.

India is considered the king of BPO outsourcing destinations around the globe. Now the question is, where do India Inc outsource to. This should be an interesting topic to look at. In the first half of 2007,BPO Services India outpaced Australia and Japan as the largest market for outsourcing contracts in the Asia Pacific region by awarding a total

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