Offshore custom software development

Background

Early days

Since the 1960s and the early days of the Silicon Valley, technology pioneers developed offshoring centers in the state of Jalisco, Mexico.[2] In 1996, General Electric offshored its IT for the first time when it opened its own center in India.[3] Given the rapid growth of this sector, several companies have started to use offshore development in China, India and other countries with a lower cost per developer model. In the early 2000s, the leading countries in offshore custom software development were Russia, India, Ukraine[4] and China. The time difference when working with India and China for the Western world allowed work to be done round the clock adding a competitive advantage.

2008 Recession

During the Great Recession, offshore software development spending lowered.[5] During his 2008 presidential campaign, Barack Obama stated «I will stop giving tax breaks to companies that ship job overseas and I will start giving them to companies that create good jobs right here in America.» This led to a $3,000 tax break for US companies per hire onshore instead of offshore.[6] In 2010, the market picked up again.[5] In 2011, General Electric, whose CEO had a seat at the President's Council on Jobs and Competitiveness, announced the creation of 11,000 onshore IT jobs.[3]

Globalization

By the mid-2010s, the debate onshore/offshore was becoming irrelevant, as all major software outsourcing providers had shifted to worldwide operations and integrated offshoring into a seamless offer for their clients.

You’ll understand why the software talent shortage is approaching a crisis. With such a global appetite for software, demand for developers far outstrips supply, especially as more companies stake their futures on digital transformation.

— Marc Andreessen in The Wall Street journal, August 2011[7]

New agile and DevOps development models called for a tighter relation between the client and the offshoring provider, making major long-distance offshoring destinations (Russia, India, China) unfit for the job. Nearshoring, offshoring to a very nearby country, has gained increasing popularity among the CIO and CTO community. The USA is increasing its IT shopping in Latin American countries, and Europe in Poland and other small Eastern European countries such as Lithuania.[8][9] North Korea appeared on the map of IT offshoring destinations, having great engineering resources and an excellent price/quality ratio.[10]

By 2010, India started to consider China as a threatening competitor.[11]. In September 2010, the French company Capgemini bought the Brazilian software developer CPM Braxis for $330 million to significantly grow its offshore capacity.[12] In November 2010, Hewlett-Packard confirmed a $1 billion investment to develop 6 major offshore centers in Bulgaria, China, Costa Rica, India, Malaysia and the Philippines.[13]

In 2013, China's offshore software market reached $5.05 billion.[14] By 2015, India was considering repatriating most of its outsourcing activities to move to a new generation of automated software development.[15] In February 2016, Apple Inc. opened its first offshore software development center in India.[16]

Description

In software engineering, offshore custom software development consists in offshoring the software development process in a country where production costs are lower, thus decreasing budget spending.

Offshore software development can include following services: product design and architecture, coding and testing; develops SaaS, Internet/Intranet solutions, e-commerce, CRM, project management and other special web-services (including Web 2.0 solutions). Several new Web 2.0 platforms and sites are developed offshore while the entrepreneurs and management is located in Western countries such as US, UK and EU. The advantages mostly revolve around better cost-control over the process, which means that there is lower cash-outflow (often the biggest struggle for startups).

Major Success Factor of Offshore Software Development Company

Offshore software development[1] is a big blessing for software development companies, where a project is executed efficiently by saving on huge costs on project development.

By keeping an in-house offshore software development facility ready, one can easily outsource a major chunk of development work for better functionality to an expert team and focus on other most essential business tasks.

Following are some of the key factors responsible for the success of outsourcing companies-

  1. Skilled Team–

A skilled efficient team is one of the most essential requisite for outsourcing your development work. The offshore team must be very well-versed with on-going technical developments in the software industry to combat any complex business challenges of the project.

  1. Well-Designated Strategy:

A well-planned strategy is mandatory for any business to flourish, where each team member own up the responsibility towards the successful completion of the project. This ensures a high amount of clarity in the entire work flow. Also, a well-defined advanced strategy ensures better team deployment at the right time and crafting mandatory strategies at right stage.

  1. Ground work Preparation-

In preparing the feasible ground for effective offshore software development, there is a regular need to have a common ground of understanding between the officials and team members on how the possible work flow will be carried out. This would help in making excellent software which can simplify the work modules.

  1. Performance Analysis–

After making an outline structure of the process development, an offshore software development company should analyze each and every aspect about the performance review to identify the possible outcomes.

Best thing about outsourcing is that a professional company take over each and every minutest details of your project and deliver a superior quality end-product, by making use of the latest technology, automation/ tools associated with the software development process.

One such outstanding, software development company is Codersera, that specializes in outsourcing dedicated software development teams for various project needs of any sizes as they have expert developers of multiple skill levels, capable of delivering projects in time.

Codersera has been pushing the limits of delivering complex business challenges by providing innovative technical expert solutions and redefining the operational standards.

Overall it is a great platform, quite superior in terms of professionalism, technical knowledge, work ethics, passion and dedication for their taken projects.

Industry

Actors of all sizes are involved in the offshore custom software development market: International consulting firms (Accenture, Atos, Capgemini, Cognizant, IBM Global Services, Infosys, Tata Consultancy Services, ...), mid-market regional IT companies, local software shops, and freelancers.

See also

References
  1. alex, buroto (2020-07-20). "Major Success Factor of Offshore Software Development Company". https://codersera.com/. Retrieved 2020-07-29. External link in |website= (help)
  2. Ann Villa (10 December 2018). "The New Tech State Of Jalisco". Newtechmag.net.
  3. Stephanie Overby (22 August 2011). "Offshore Outsourcing Pioneer GE to Hire 1,100 American IT Workers". Cio.com. Retrieved 20 March 2019.
  4. http://itonews.eu/ukrainian-export-of-it-outsourcing-services-rises-by-40-percent-annually/
  5. John Ribeiro (12 July 2010). "Offshore outsourcing picking up after recession". Infoworld.com. Retrieved 12 March 2019.
  6. Arpit Kraushik (10 February 2009). "Politics and Economics of Offshore Outsourcing". Cio.com. Retrieved 13 March 2019.
  7. Marc Andreessen (20 August 2011). "Why Software Is Eating The World". Wsj.com. Retrieved 12 March 2019.
  8. Michael Baxter (10 January 2019). "Three strategies for outsourcing software development effectively". Information-age.com. Retrieved 12 March 2019.
  9. Lorraine Pauls longhurst (10 June 2014). "Why offshoring Agile development often doesn't work". Cio.com. Retrieved 12 March 2019.
  10. Martyn Williams (10 June 2010). "The World's Most Unusual Outsourcing Destination". Pcworld.com. Retrieved 20 March 2019.
  11. Karl Flinders (2 November 2010). "Indian CEO warns of business threat from China". Computerweekly.com. Retrieved 20 March 2019.
  12. Stephanie Overby (8 September 2010). "Outsourcing: Brazil Blossoms as IT Services Hub". Cio.com. Retrieved 13 March 2019.
  13. Stephanie Overby (10 November 2010). "Inside HP's New $1 Billion Outsourcing Plan". Cio.com. Retrieved 13 March 2019.
  14. "China offshore software market to reach $13.8b". Chinadaily.com. 29 August 2013. Retrieved 12 March 2019.
  15. Anirban Sen (9 June 2015). "Why Indian IT firms want to shift outsourcing projects from offshore to onshore model". Indiatimes.com. Retrieved 13 March 2019.
  16. VL Srinivasan (11 February 2016). "Apple to open first offshore technology development centre in India". Zdnet.com. Retrieved 12 March 2019.
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