Many Are Doomed Before They Even Take Off

According to the recent study from PriceWaterhouseCoopers, 48% of ITO/BPO buyers feel they lack experience to go offshore and another 37% confess they lack skills to manage outsourcing. Too often offshore vendors are the ones who are blamed for the failure; now, off cause, they share responsibility.

But here is the bitter truth: enterprise buyers make mistakes that cost them millions of dollars and yet they do not feel the need to change their methods. What is a provider to do? We feel it is our duty to share what our most successful Fortune 500 clients did to get the most from offshore software development outsourcing. The following are 3 components critical to success:

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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:

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Make it work both ways

Do you feel safer driving a Volvo? More creative using an Apple laptop? The power of the brand makes you feel you are. But are you really safer or more creative for that matter? This works quite the same way with ITO brands such as Tatva, Wipro, you name it: you might feel like the smartest outsourcer, but are you? Or is that just the charm of the brand working on you?

Actually, buyers of outsourcing services largely define the quality of the outsourced product by the very nature of their organization. If they don’t run their processes ad hoc, have a robust outsourcing management & governance framework and strive for transparent, long-term partnership, they are able to get top quality services from even the smallest ITO vendor.

However, internal readiness alone doesn’t guarantee high quality of the delivered service.

If an organization has decided to outsource to a small ITO provider offshore, it must first assess how the vendor manages software quality. Whatever offshore partner you choose, we encourage you to look for a robust quality management framework on the vendor’s side.

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If you don’t treat your vendor as a trusted partner

Setting aside all the complexity of a proper evaluation, the vendors that are selected to perform offshore software development deliver the best return on investment if they are treated as partners. Actually, the most successful projects we have accomplished had less control and more productive cooperation. On the contrary, the failed projects had the following symptoms of mutual distrust, strain and resulting collapse:

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