Today, offshore IT outsourcing has become a feasible option for organizations to retain and gain competitive edge in the global marketplace. Offshore outsourcing was a concept that started way back in 1990, and has now become a trend as it harnesses the power of information technology from far away locations to bring in economies of scale and cost competitive operations for implementing and supporting a client's mission-critical projects.
In today's high-tech world, the terms 'onsite', 'offsite', and 'offshore' only refer to the physical locations. Thanks to the advancement in technology, the terrestrial and satellite dedicated links, video-conferencing, online chats, e-mails, and telephones, a dual-shore delivery system works as a single virtual unit, regardless of where people are actually located. Different offshore outsourcing delivery models represented in this white paper have the potential to be the offshore outsourcing business model for tomorrow's organizations as they are committed to cut cost, improve cycle time and speed up time to market to match the global client's requirements.
Introduction to Offshore Outsourcing
From humble beginning as a mere cost-cutting concept, offshore outsourcing has gradually moved ahead and established itself as a successful business model by rendering not only cost-effective but also sophisticated and highly efficient quality services. According to International Data Corporation (IDC), US-based companies will triple their offshore outsourcing spending from $5.5 billion in 2000 to more than $17.6 billion in 2004! The offshore outsourcing trend has crossed all the barriers of political turmoil, language and culture difference and has proved that no matter in which part of the world your service provider resides, what really matters is industry-standard, high-quality service together with decisive cost-advantage. But for quality and on-time delivery of offshore outsourcing services to a client, the offshore outsourcing service provider has been dependent on numerous delivery models that have evolved since the last one-decade. A few of them are:
The distribution of activities across the various delivery models may vary from one project to another. This may be attributed to factors such as effort involved, level of interaction, cultural and time-zone differences. Some offshore outsourcing projects like migration and re-engineering can be executed totally on the offshore location, but others like enterprise application integration-related projects and demand almost a cent per cent execution on onsite location. This article will give an overview of the different kinds of offshore outsourcing delivery models followed by service providers the world over. It tries to give a general definition of the different offshore outsourcing models and has listed the benefits of each one of them while trying to portray a picture of actual distribution of activities at different locations.
