India Is Not Cheap
Unless You Are IBM
Too often companies that consider software development outsourcing use the wrong set of criteria to evaluate different offshore destinations. They look more at external factors when they should be basing their decision on internal capabilities and how their company’s strategic goals align with the offshore country’s characteristics. Organizations that take offshore software development seriously don’t follow the off-the-shelf “let’s try India” scenario, rather they assess each country against the following internal needs with a sharp focus on quality and price:
Outsourcing Speed-to-Market
These days companies are under constant pressure to introduce new products and services faster than competition. Offshore countries that are geographically & culturally close and highly competitive in terms of difference in wages strike the perfect balance between quality and speed. The Philippines and Mexico are “speed-to-market” destinations for companies based in the USA. Russia and the Eastern European countries are “speed-to-market” destinations for Europe, while China is the preferred offshore destination for India and Japan.
Outsourcing Strategic Functions
According to the recent report by PriceWaterhouseCoopers, smart companies move into the second wave of outsourcing. They recognize the maturity of ITO industry and the opportunities it brings. Thus they are ready to develop or upgrade their core IT systems offshore.
Handling off the development of a complex project offshore requires a country to have a vast pool of talent, and therefore, a robust educational system with a clear bias towards mathematics. Companies are eager to pay relatively more for hi-end teams that are able to design end-to-end solutions and manage complex projects. Russia and the Ukraine are preferred destinations for the outsourcing of science-intensive, large-size projects. In fact, IBM, Google, Motorola and Dell have already opened Research & Development centers in Russia.
Outsourcing Low Level Programming Work
Developing highly complex applications involves a lot of coding and testing. While these tasks are highly repetitive, they require the utmost attention to detail and the level of efficiency upheld by Toyota’s assembly line. This is exactly what major Indian outsourcers such as Infosys, Tata and Wipro offer.
