Offshore Outsourcing Model

Ascent Web TEchnology - Offshore Outsourcing Model

“Offshore Development” in the IT world is the term most often used to describe the business of outsourcing software programming, web and multi-media projects to contractors or wholly-owned facilities located in foreign countries with lower labor costs. India is the largest provider of such services, estimated to be worth $6.3 billion in 2000-2001.You know the reason behind India being the main destination for IT-enabled services for major global companies?

Offshore Outsourcing Offshore Outsourcing Model
Today, businesses irrespective of their size and location are adopting Offshore Outsourcing Model to gain cost benefits and deliver quality services to their customers. But what exactly the Offshore Outsourcing Model is and why businesses are implementing it?? Let’s find out.
What is Offshore Outsourcing Model? - An Eye Opener
Offshore Outsourcing is the modern business approach of outsourcing / assigning some of its commercial activities to expert offshore companies in order to fetch better quality, cost and technical excellence than what is available domestically.
“Hire rather than own expertise” is the concept behind Offshore Outsourcing Model. Rather than spending money on developing and maintaining certain non-core activities, businesses can outsource them to offshore experts and get quality work at much lower price.
Gartner, one of the world’s largest research and analysis organization, has predicted that total global offshore spending on outsourcing IT Services will reach $50 billion by 2007. The report has also mentioned that emerging countries like India, China, Brazil and Russia possess required capabilities in terms of labor, technology and infrastructure to undertake IT related outsourcing activities successfully.
Offshore Outsourcing Model Benefits of Offshore Outsourcing Model

Offshore Outsourcing Model offers businesses multiple benefits in terms of Cost, Quality and Technical Excellence. Here are some of the noticeable benefits of Offshore Outsourcing Model:

Domestic Markets

Realistic cost savings of about 40% as compared to onshore or domestic markets. (Source - Ventoro Research Report)
Quality Product

Quality Product Delivery by offshore companies using their expertise, extensive domain knowledge and implementation of Matured Execution Models in their processes. (Source: NASSCOM)
Technical Excellence

Technical Excellence offered to clients by capitalizing on quality Human Resource, robust infrastructure and domain related Research and Development (R&D).

Maximum time benefit by leveraging the time difference between service provider and service requester.
Reduced Project Cycle

Reduced project cycle by implementing globally recognized Project Management systems in their operational activities.

Operational Flexibility by quickly adapting to changes in business requirements.
Better finance management

Better finance management through clearly defined financial obligation and reduced cost.
Improved competitiveness

Improved competitiveness since offshore companies deliver quality services at affordable rates.
Outsourcing

Renewed focus on company strategic plans by outsourcing certain non-core business operations to offshore companies.
Exposure to New Markets

Exposure to new markets by making alliances with offshore companies and taking business to unexplored areas.
Offshore Outsourcing Model How Offshore Outsourcing Model Works? - Implementation

As mentioned above, Offshore Outsourcing Model is based on “Hire rather than own expertise” concept. In other words, businesses prefer to outsource/transfer their non-core activities to offshore companies who are experts in their working domains.

By doing this, businesses get expert services at low cost as compared to the domestic market. Besides, businesses also get more time to concentrate on their growth plans that they might have spent in maintaining these activities.