Peter Saileky
"Be honest with your team about your business vision and plans, that will improve team morale..."

According to the recent survey by TPI, outsourcing contracts slow by average 30% this year. The main reason for the decline is that Software Development wins the stiff competition. Companies choose offshoring instead of outsourcing in increasing frequency.

Despite there are a lot of talks about threats of Software Development, such as unemployment increase and security threat, companies inevitably turn to offshoring strategies. The survey covered not only the US, but the global outsourcing markets of IT, Software Product development, HR, R&D and other frequently-outsourced services. It shows the drop-down of both new contracts and restructured contracts. Outsourcing contracts’ values has decreased as well.

Why companies shift to Software Development in spite of the robust promotion of onshore providers? The answer is clear: they are striving for more than just cost-saving. Together with lower prices offshore vendors offer innovative approaches and specialized expertise.

Many Software Development countries have gained many-year experience in their increased focus areas. There are some most frequently outsourced processes which can be operated by offshore provider perhaps even better than onsite. They are HR, Sales&Marketing, R&D and Software Development. Due to high demand to these services, Software Development companies have acquired enough knowledge and expertise to provide high-quality services. Sending a Software Product development Custom Software Project to ad hoc offshore programming team can deliver high-quality product along with saving internal resources and time; and will provide a tenfold decrease in price, as well.

IT outsourcing is the first to be shifted to offshoring. Software development, re-engineering, support and maintenance tasks can be transferred to offshore location with minimum losses. They are less susceptible to cultural and language barriers than other frequently-outsourced activities. No matter if Software Product development is your core business activity or not, you can use Software Development strategy for implementing a number of programming, testing, or even R&D tasks.

Offshoring makes sense not only for time-consuming processes (like testing or coding) but also for knowledge-intensive processes (programming, architecture design, R&D). Global outsourcing market provides a lot of highly-qualified programming teams all over the globe.

These alluring prospects provided by offshoring are out in the way of outsourcing. Another survey by PricewaterhouseCoopers reports that 90% of 300 executives with outsourcing experience polled worldwide said that they would outsource again. But some of them have already shifted to offshore providers, and some will shift in future. However there is no reason to speak about the decisive victory of offshoring. There are still crowds of onshore outsourcing adherents which will maintain or even increase its share in global outsourcing market.

Published on 10/9/2007