Outsource to a vendor or set up your own subsidiary?
Deciding to go offshore is just the first step in achieving results of your plan.
- Outsourcing. Contracting to an outsourcing service provider is the quickest way to go offshore, because you don’t have to hire and train workers or rent an office and set up your own infrastructure. With a consulting company, the hourly rate can be higher but the overall cost less. They’re not your team, but you can stop relationships more easily if you need to. So, the overall quality and reliability of service is higher.
- Outsourcing to established IT Consulting Company could be a good first step in your offshore strategy. Your company needs to prove that offshore outsourcing will work for you. And the best approach is to outsource first.
- Many companies decide to outsource offshore direct without knowing the issues that must be considered. Some established companies are going directly offshore without even thinking it through. Corporate boards of directors and VCs ask executive management what their Offshore Strategy is. There is a lot of pressure on the CEO and CTO to have a well-defined plan. What we see is that many companies outsource offshore without defining any long-term plans.
- LSA Consulting UK’s offshore outsourcing model for offshore software development guarantees cost savings up to 50% within the first 12 months and with productivity increases. Our established software development processes, a strong portfolio of reusable frameworks, time zone advantages and experienced project teams combine to deliver expected business success to our clients.
- This is a reason, why many technology and industry specific companies have set up Offshore Development Centres with LSA Consulting UK for offshore outsourcing and realized high returns on their Offshore Development Model.
Offshore development centre
- LSA Consulting UK currently has fast growing offshore development centre with experienced software engineers. The depth and breadth of our industry and technology expertise allows to offer offshore outsourcing in the areas of infrastructure outsourcing, applications outsourcing, R&D outsourcing.
- With state-of-the-art communication facilities and infrastructure, our offshore centres work as a virtual extension of our client’s development environment providing 24×7 services. LSA Consulting UK offshore software development centre is located in India.
- The LSA Consulting UK facility supports Executive, Account and Project Management functions as well as high-level System Architecture and specialized consulting and deployment services. Most software development work occurs in LSA Consulting UK’s state-of-the-art development facilities in India.
Offshore Development Model
For projects that are less than 4 calendar months, LSA Consulting UK usually delivers services completely offsite. For longer agreements, our consulting team typically use a mix of offshore and onsite consultants depending upon project requirements.
Taking advantage of the quality and costs of offshore software development, LSA Consulting UK delivers solutions using onsite/offsite development model where certain phases of the project lifecycle are done with direct client interaction and the execution of pre-defined design specifications is performed by offshore team.
At least one local Project coordinators is usually onsite during the design phase of a project to interact with the client and fully understand and develop requirements and specifications. Most of these engineers return during the development period and for most of this phase the team is concentrated offshore although an onsite coordinator from LSA Consulting UK stays with the client.
LSA Consulting UK usually uses a small team of onsite consultants to deploy a solution.
By following most popular software development methodologies, we are able to drive project through all required milestones. Depending on the requirements of your project, we will begin in one of the following stages:
- Analysis – Our India based project management team will work with you to develop documentation on the scope and requirements of your project.
- Design – Working with our hand-picked offshore developers, we will develop the technical design specification for your project. The design documentation includes technology requirements, data modelling, object modelling, screen design, resulting in a blue-print for your project.
- Development – Our India based project management team monitors daily the construction of your project, ensuring the quality of your project, as well as completion of milestones. You are kept involved in the status of the project, and as development progresses, have every opportunity to see and test the results.
- Transfer – Your project goes through extensive bug testing and resolution. When satisfied, your project is deployed into your production environment
LSA Consulting UK Offshore Dedicated Development Centre Services.
LSA Consulting UK is one of the major players in Indian software development market. We offer to our client’s one of the hottest services in Offshore IT Outsourcing market – Offshore Dedicated Centre in India (ODC). Boosting the scale of your IT development, ODC establishment will save you up to 60% of IT spending by cutting down employment costs, contract and project execution.
ODC is a dedicated, customized, and secure Software Engineering Centre that follows client’s practices, methodologies and culture.
It is an extension of your organization in India leveraging vast resources of technically qualified and trained IT resources and established infrastructure available in India at competitive price. LSA Consulting UK ODC services help you to avoid concerns about incorporation procedure, or legal fees, payroll, legal compliance, long-term office leases, security etc., but full control over intellectual property generated without enormous investments. ODC means that you pay only for what you use – IT infrastructure, scalable technology resources, office administration, and no redundant expenses.
Our customers manage ODC as their own IT department with internal development schedules and deliverables, thus minimizing possible business risks.
Why ODC with LSA Consulting UK?
- Focus on Core IT Competencies – Save on Cost of Appl. Development
- Avoid Long-term Investments
- Lower Business Risks
- Best Practices from Leading Indian Development Company
- Quick Return on Investment
- Full Operational Control
- Dedicated Development Team
- Established IT Infrastructure
- Access to the Best Talents in India
- Flexible Pricing
- Improved Product Release Time
What are the advantages of ODC?
Currently a great number of international corporations are establishing their on-site software development centres in India for the unique value proposition it offers – leverage India’s abundance of highly qualified IT resources available at a competitive cost. However, to set up your own Development centre you would need to make long-term investments and deal with challenging issues of launching business in another country with different laws and regulations. LSA Consulting UK offers you better solution – immediate benefits of ODC without any long-term commitments or large investments.
The main advantages are:
- Focus on Core IT Competencies
Having delegated some of the projects to your ODC; you will have available more time and resources of your IT department to focus on its most critical and value-adding technology tasks. At the same time ODC will drive your IT spending cost down by approx. 60%. By having that, on the same budget your IT output will grow dramatically, benefits being directly reflected in the bottom line of your business.
- Avoid Long-term Investments
Being actually a branch of your business in India; ODC does not require any long-term commitments or up-front investments. But it saves you from a continuous headache about incorporation issues, establishing IT infrastructure, legal fees, payroll, legal compliance, long-term office leases, security etc.
- Lower Business Risks
Dealing with software vendors typically means spending much time on negotiations, requirements definition, and contract arrangements, which is usually associated with a great number of possible risks and project failures. Once you have chosen ODC as your reliable partner you will benefit from a continuous cooperation with one of the most successful Indian IT companies resulting in 40% savings in time on requirements definition, 50% savings in time on contract arrangements, and 20% savings in time on project arrangements, and a considerable decrease of associating risks.
Best Engineering Practices from Leading Indian Development Company.
Working with one of the established Indian software company your ODC will inherit our best practices gained over years in implementing technology projects for Fortune 500 and small businesses.
- Quick Investment Return
ODC delivers immediate returns. It has a quick effect on you bottom-line – without affecting the quality of the deliverable. Most ODC customers experience increased quality while enjoying reduced costs.
- Full Operational Control
You manage your ODC as if it were your local IT division. You have your development schedules and deliverables which your ODC team adheres to.
- Dedicated Development Team
Once a team of software engineers is assigned to our customer ODC, LSA Consulting UK doesn’t change its structure unless there is a request to do it. This stability of the team ensures higher productivity and helps to maintain minimum learning curve for the company product development.
- Established IT Infrastructure
ODC is a dedicated office environment residing at our technology premises. Office infrastructure includes all modem facilities – computers, printers, scanners, fax machine, phone lines etc. You have every guarantee that only your team members have access to the work place, and network security is built into your ODC. To manage your remote team you are provided with a number of reliable communication services, including e-mail, secure ftp- and http-servers, multi-channel phone lines, fax, voice mail, and teleconferencing. You also get full administrative support.
- Access to the Best IT Talents in India
ODC offers a team of best-of-breed software engineers. Typically an ODC team can be gathered within a short amount of time. We build a ready-to-deliver team with just-the-right skills within two-four weeks, depend on customer requirements. This manpower is selected on the basis of your criteria, no matter how strict they are. Every team member is selected to meet our customers’ strict requirements for relevant experience, domain knowledge, and educational background.
- Flexible Pricing
ODC offers a very customer – friendly pricing practice with no hidden costs. You can choose among a variety of pricing models to suit your needs best.
- Improved Product Release Time
Running a dedicated centre you will save time and efforts by omitting redundant aspects of projects’ initiation and management. Once you have established an ODC, certain unnecessary and typical project phases may be simply passed by freeing up your team’s time and budget.
The LSA Consulting UK Offshore Development Process Methodology
Our well-defined, 6-step methodology has been evolved based on our development experience of numerous offshore projects. This approach uses offshore and onsite implementation.
- Step 1. Dedicated Team Creation.
– Scope Agreement sign off.
– Need to identify key team members for project.
- Step 2. Onsite to Offshore Knowledge Transition.
The main goal for this phase is to understand the client requirements, business processes, company standards, the specific systems IT environment as well as the approach that will be used. It’s a huge learning curve.
- Step 3. Offshore Process Definition.
Perform customization of the methodology for the client specific requirements.
- Step 4. Offshore Simulation.
– Simulate client IT environment at offshore development Centre.
– Review and confirm the Service Level Agreements.
– Build the Offshore Infrastructure (IT, software and physical).
– Set up the offshore team.
– Metric-defined training of the Offshore Development team.
- Step 5. Offshore Project Execution.
Start executing project according to the project plan for the first 6 month period.
- Step 6. Review the project deliverables and identify the weak areas of the implementation.
– Implement the feedback.
– Have the first year Service Agreement review.
OFFSHORE DEDICATED CENTER
An ODC is a dedicated, customized, and secure software development centre established for a customer that needs to outsource application and maintenance work for a long period of time. The ODC service model grew up from the traditional project implementation model to accommodate the specific needs of customers in a best possible way. The major advantage of an ODC is that it reduces several phases of executing a typical IT project, has dedicated to customer technical resources for an extended period of time. This approach gives the customer better control over the process of product development, and it helps to have higher resource efficiency (cost saving up to 60%).
The services provided by an ODC depend on the customer’s specific needs and on the vendor’s offerings and expertise. However, ODCs generally provide the following core services:
- Office Management Operations management HR and Training
- Office equipment
- System administration
- Recruiting, hiring and training
- IT Infrastructure
- Help Desk Support
- Employee Benefits
- Communications infrastructure
- Accounting ODC SAVINGS and office service
Outsourcing IT projects to offshore vendors typically reduces development costs by 40- 60% when customer selects to set up an ODC, which is important in terms of aligning the company business goals.
LSA Consulting UK Advantages: Process Expertise
- LSA Consulting UK utilizes different development methodologies in operation of ODCs for its customers: RUP, Agile Development, XP, RAD, and Microsoft Solutions Framework.
- LSA Consulting UK is one of the leading Indian software companies.
- LSA Consulting UK has provided IT services for a number of Fortune 500 clients as well as for small start-ups
- Dedicated Technical Support team available 24/7
- LSA Consulting UK partners with many local Universities and has a huge database of IT professionals. More than 85% of LSA Consulting UK engineering personnel have Master Degree.
- LSA Consulting UK has very low turnover rate – less than 5% per year.
Why Outsource to LSA Consulting UK
LSA Consulting UK is a premium outsourcing company located in India. Our services are cost-effective and can be customized to suit our client’s specifications.
Choosing LSA Consulting UK as your outsourcing partner can help you gain a wide range of benefits:
- International quality standards
- Cost-effective operating costs
- Improved efficiency with better productivity
- Extra time to focus on core competencies
- State-of-the-art technology
- Quick turnaround time
- Assured data security
Contact us today to get started!
Different type of ODC service can be delivered based on agreement:
- Dedicated team that is allocated to work only on assigned project/client account;
- Joint venture ODC which funded by both partners to share risks and have result tracking performance;
- Build – Operate – Transfer ODC. LSA Consulting UK builds an ODC, set up and launch till certain point infrastructure, staffing and dedicated development centre for a pre-arranged fee. The result is then transferred to the client at a predefined price.
Why Outsource to India?
In a recent survey, 80% of European and US outsourcing firms ranked India as their number one outsourcing destination. The National Association of Software & Service Companies (NASSCOM) also reported that almost half of all Fortune 500 companies choose to outsource software development to Indian outsourcing firms. Even though many other countries (including China, Mexico, Ireland and the Philippines) have emerged as major competitors, India has managed to outmanoeuvre all others and emerge as the top outsourcing destination. Major differentiators such as certain favourable government policies, fast-developing infrastructure, and an immensely talented work force are responsible for the Indian IT outsourcing industry continuing to experience a tremendous growth rate of 25–30% per year. Read on to find out more about why India remains the ultimate outsourcing destination.
India has the largest technical and professional talent pool in the world
India remains unmatched when it comes to its vast pool of skilled and talented human resources. The country has a population of over 1.2 billion people and around 3.1 million graduates are added to the workforce each year. India also holds the distinction of being the largest English speaking nation in the world, larger even than the US and UK combined. Apart from the vast numbers, is the quality of talent that attracts companies wishing to outsource. "The attraction of India is not only numbers but, more importantly, the quality of the talent. Two major consumers of outsourcing services are the USA and Western Europe respectively. According to IDC, the US-based companies will spend billion on Information System outsourcing, while Western Europe will spend billion.
Approximately 18 %( billion) of this spending falls at offshore contracts. Particularly, US-based companies have spent .5 billion on offshore outsourcing services.
India offers flexible pricing options
The number one reason why India remains a top outsourcing provider is due to the significant cost savings that companies can achieve. This is mainly because of the wide gap that exists between personnel costs in India and that of the developed countries. For example, a good developer in the U.S. can cost anywhere from $50 to $80 an hour (for a full-time staffer depending on skills and experience). In comparison, the hourly cost of a developer in India can be negotiated. This pricing flexibility allows companies the freedom and creativity in managing their budget and helps them reap large profits.
India provides consistent high quality services
While the cost factor plays a huge role in outsourcing, the consistently high quality provided by Indian outsourcing firms has also enabled India to remain as the top outsourcing destination. The National Outsourcing Association (NOA), in its Annual Offshore Outsourcing Conference, reflected on the trend commonly seen among International companies who choose India as their preferred outsourcing destination. "Cost reduction was only part of the reason that companies were considering offshore outsourcing, there were benefits to be had in time-to-market and quality, leading to an adage that companies initially chose India to save costs but stayed for the speed and quality!"
India boasts of the best in Infrastructure and technological capabilities
Modern India is well-developed and offers state-of-the-art telecom, ISP, and cellular networks in all major cities and towns. Clients are offered the latest and best in software technology, including customized solutions for various applications such as e-commerce, business process re-engineering, system migration, legacy system maintenance, system integration, and much more. Outsourcing companies also maintain uninterrupted communication channels with clients by providing high-speed bandwidth via satellite connectivity, submarine cables and fibre optic networks.
The Indian Government is stable and offers attractive IT policies
The Indian outsourcing industry is supported by a stable pro-IT government whose policies on the economy, GDP growth, taxation, power, telecom, industrial parks and special zones have been helpful in improving infrastructure as well as communications systems. IT is regarded as one of the top 5 priority industries in India, and the government has framed policies to obtain maximum benefit from IT outsourcing to India. The government has offered its support to the IT industry by providing various tax-related and other benefits and by enacting the Information Technology Act, which recognizes electronic contracts, bars cybercrime, and supports e-filing of documents.
Indian companies provide the quickest time-to-market
Indian outsourcing companies are able to provide the quickest time-to-market due to the advantages gained by time zone differences. The 12-hour time difference between India and the USA and 5.5 hour time difference between India and UK provides companies with numerous opportunities for work to be completed earlier than expected, leading to greater efficiency, increased productivity and more time to focus on other crucial tasks. The time difference makes India an ideal option for clients who wish to outsource various service-related options, such as 24X7 Customer Support and Helpdesk services.
India—the most preferred global destination
India continues to remain the world’s favourite when it comes to outsourcing. It has gained global confidence with major players such as Cisco, Oracle and Hewlett-Packard opting for India because they are confident of gaining access to superior talent, quality results, fast turnaround times and low costs. Mr. Elfrink, (Cisco Systems), reiterates this point when he says, "We believe that India is the hub of the world where the IT sector is concerned." India also holds 65% of the global offshore outsourcing BPO market, making it the dominant leader in providing outsourcing services.
To summarise Indian strengths in software outsourcing are well known, so we will be brief here. The Indian software industry is a decade older than the others and has gained a world – wide reputation for its software development resources and strong business ties with the Indian diaspora in the USA and Western Europe. It is no exaggeration that the Indian experts hold leading positions in the overseas IT –sector.
Indian companies have proven their commitment to quality. The majority of companies worldwide which have achieved CMM level 5 are located in India.
India’s standing in the geopolitical risk scorecards of management consultancies with a stabilized economic and political climate brings in a positive environment for the development of IT industry.
Offshore Outsourcing Knowledgebase
- Extreme Programming and Embedded Software Development.
By James W. Grenning, Embedded Systems Conference – Chicago 2002.
10 tips for successful outsourcing
- Clearly define the scope and schedule of your project.
This might seem obvious, but any successful outsourced project always starts with a clear statement of what you are hoping to accomplish. Define your project requirements up front. Service providers need accurate, complete information to present you with realistic proposals and to quote you a reasonable price. Be specific about the deliverables you expect the vendor provide. Give vendors as much information as you can about what you need delivered and the way in which you need the work done. Also, be clear and realistic about your schedule requirements – project schedules can have a huge impact on project costs.
- Evaluate a service provider like you’d hire a full-time employee
When you’re evaluating proposals from service providers, don’t be afraid to ask questions. Just like hiring a full-time employee, selecting a vendor is a very subjective experience. Check their references and ask for feedback from other clients who have used their services. Engage in a dialog – if you have any concerns about a vendor’s specific capabilities, voice your concerns. Don’t just stew about it and hope for the best.
- Look for specific experience fit
Ideally, the service provider you select will have specific experience with the type of project that you’re undertaking. You don’t want to be somebody’s "guinea pig." This is especially crucial when outsourcing complex technical projects such as software development. For example, if you’re looking for someone to develop an application for the Palm PDA, make sure they’ve actually completed commercial projects on that platform for other satisfied customers. This advice holds true for other types of projects as well. If you need a business plan for opening a retail store, you’ll get best results if the consultant you hire has verifiable experience in the retail sector.
- Don’t choose a vendor based solely on price
Though it might be tempting, never select a vendor based solely on price. Experienced buyers who have outsourced many projects and evaluated hundreds of proposals almost always recommend discarding the highest-priced and lowest-priced bid. Buyers report that their most successful projects are the ones where they felt the vendor offered a balance of good value and quality results.
- Review portfolios and samples
Examine the vendor’s previous work (their "portfolio") and make sure that their previous work meets your expectations for quality and style. If you’ve evaluated a vendor’s portfolio, references and previous experience and are still unsure of their capabilities, consider asking them to do a quick mock-up or provide a basic outline of a work plan. A service provider who really wants to win your business might be able to give you a rough concept so you can better understand their approach to solving your problem. But never cross the line between asking for a mock-up and insisting that a vendor provide you with finished work "on spec." No qualified professional expects to work for free.
- Start small
When engaging with a service provider for the first time, start with a project that is relatively small and simple in scope. This will give you a better idea of the provider’s style and capabilities before you entrust a "mission critical" project to them.
- Tie payment to clearly defined project milestones
Just as you should be clear about project scope, make sure that you define a work plan for your outsourced project with clearly defined milestones. Having scheduled checkpoints where you review the status of the project as it works toward completion-is an easy way to ensure that you meet your final deadline and that the final product meets your standards. Tie the vendor’s payment to these milestones. A good guideline for IT and software development projects is to pay no more than 20% to 30% of the total project price up front, with the rest of the payments awarded based on the completion of 3 or 4 milestones.
- Negotiate ownership of work up front
For any type of outsourced project, make sure that you are clear about who owns the resulting work product and any important components of that product. Make sure the service provider understands how you intend to use the deliverables that they are agreeing to provide. For example, the development of a custom software application for your personal use would be substantially different from the development an application that you intend to package and re-sell.
- Don’t forget about support after the project is complete
For technology projects, it’s a good idea to specify a warranty or support clause so that you are assured of some amount of continuing support from the vendor after the project is complete. It’s much easier to negotiate a support clause before the service provider begins work, rather than after the completion of the project. Even creative or business services can benefit from a support clause. Suppose you need some changes to a business plan based on feedback that you get from potential investors. Or maybe you find that you need that snazzy new logo delivered in a new type of file format. Specifying some amount of free support or negotiating discounted prices for future modifications can save you time, money and headaches later on.
- Get it in writing
During the course of a service engagement, the scope of the project, deliverables or even the agreed upon price may change. Make sure that you clearly communicate any schedule, scope or payment changes to your service provider and get confirmation from them – in writing – that they understand and agree to the changes. Similarly, keep a record of any agreement changes requested by the service provider and whether you accept or reject those modifications. Save copies of any email exchanges that you have.