Sustainable Business Transformation

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For a typical Software Services/Product Development company, what are the key factors in deciding to engage with an Outsourcing Partner V…

Posted by Hemant Puthli on October 8, 2015

Answer by Hemant Puthli:

Here's an indicative list of factors (in no particular order):

1. Technology: How rare or common are the platforms involved? If rare/ unique, then there may be very few vendors available for you to partner with, and you may either have to work on their terms or DIY.

2. Resources: Do you have the ability to manage resources at a remote location? Your offshore center needs to be able to attract and retain the right kind of talent and if you are not sure you can do that yourself, you may want to find a partner.

3. Facilities & Infrastructure: Do you have the wherewithal to build and operate a development center at a remote location? If not, consider partnering.

4. IP Protection: How sensitive and well protected is your "secret sauce"? Are   you comfortable with a 3rd party handling  your code?

These are just a few of the important factors.

Many companies enter in to a Build-Operate-Transfer (BOT) type of agreement with a vendor, whereby the vendor does the initial work and runs the center for a few years and then transfers ownership to the customer. This approach addresses many of the initial challenges but also brings its own risks.

I would strongly recommend the formulation of an outsourcing/ offshoring strategy – which involves a methodical study of all the relevant factors, followed by a financial model and risk analysis of various alternatives.

Please also see my answer to a related question:
What is the best way to create an offshore software development center?
You may find some relevant points there as well.

For a typical Software Services/Product Development company, what are the key factors in deciding to engage with an Outsourcing Partner V…

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