Understanding Offshore Software Development Outsourcing

What is outsourcing?

Outsourcing, as the name suggests, is the transfer of work or service from the parent organization to a third party, in order to meet financial and managerial requirements like reducing development costs by reducing the labor and operational costs, it also facilitates to increase the amount of workload taken by the parent company and the distribution of the workload to different outsourcing companies as per the requirements of the parent company, thereby enhancing the quality and the rate of development of the software.

Software Development Outsourcing basically is of two types

1. Regional Software Development Outsourcing: The outsourcing of software within the regional framework of the parent company or the country in which the company is based. For example a firm in Los Angeles outsourcing its projects to a firm in Hawaii.
2. Offshore Software Development Outsourcing: The outsourcing of software beyond the framework of the parent company i.e. outside the country in which the parent company is based. For example a firm in the United States outsourcing its projects to India.

Offshore Software Development Outsourcing is generally preferred, since in case of Regional software development outsourcing most of the advantages of outsourcing the project are not met, since the project operating cost is almost in the same range in all over the country. Most of the software firms based in the United States and the United Kingdom prefer to outsource their software development projects to knowledge based and developing economies like India and China, however India due to its edge over China caused by the excellent English Language skills of its IT professionals is generally the preferable destination of most of the IT companies. What India lacks is a strong development infrastructure to develop its own projects, however it has a good base on outsourcing projects from US and UK firms.

These countries are generally preferred for offshore software development outsourcing because unlike their American and British counterparts the IT professionals in these countries are highly competent, intelligent, have a professional attitude, flexible in their work and don’t mind working overtime or in odd hours in order to meet client requirements and they also charge less than their employees in the parent company, which ultimately leads to the improving of quality due to dispatch of the project to different locations meeting different requirements, speed is enhanced and the technology becomes fast, leading to fast development of the software industry and other technologies.