Offshore Software Development

World Wide Web, Internet has become business tool of today's world. Offshore software development is picking up pace gradually and giant players are soaring interest in Indian marketplace as it offers 360 degree solutions and statistics shows India is the first choice as offshore destination.

Initial thrust came in during 1970s when jobs started moving out of developing nation. The large enterprises started looking beyond the national boundaries in search of low cost operation, cheaper market and cheap skilled manpower for better investment. Offshoring just involves shifting business segment from national boundary to another international location; remember not to another company - only a segment of business is moved to a new location in another country rich in cheaper resources. But, when the business segment is monitored by another international company the term offshore outsourcing becomes prominent. This trend has helped both the companies involved, to improve their GDP. Market study shows that IT work in western countries cost $100/hour, the same job when done in India cost just $20/hour, really an amazing figure.

Let me come to Total cost of Offshoring i.e. every small hidden cost involved should be considered. Offshore location selection cost, outsourcing cost, contract negotiation cost, and other cost involved are also added in TCO. Then equating offshore outsourcing as long term investment to long-term payback, i.e. return on investment we find both are directly proportional to each other; increase in one factor will ultimately increase the other and depreciation of one will reduce the other.

Concentrating on the trends and scale of software offshoring we find this trend has touched all the business verticals across the globe and a rising trend is seen, statistics says there is rise of nearly 30% every year in the IT sector for the last 3 consecutive years. Still it is very difficult to quote about the risk and opportunities this trend will offer to domestic employment. Operational work is moved to a new location this has brought down the operation cost, helped to improve economic condition, and maximize return on investment with very less margin. This will also help enter international market so that you can gain a brand name eventually and also retain your customers for longer time. With cross country investment Capital mobility has become hot topic of discussion these days, talking about this we find that capital mobility is effecting economic growth and is helping attain higher degree of economic growth. Capital liquidity is maximized, with more investment in other sectors. Small and mid-size companies are also getting better exposure and bigger market to invest and capture.

Offshoring means re-locating various business processes from one country to another
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