All phases of the software development life-cycle (SDLC) in a geographically distributed environment (offshore/nearshore set-up) should be well aligned so that proper connectivity and sink is established from the planning to executing stage. A lot of buzz has been growing in IT sector particularly in Software Development Outsourcing models. The Sourcing and Vendor Management Organizations at customers use risk mitigation strategies to avoid hassle in project delivery systems.
Lack of automation, inefficiency at service providers side, high rates, lack of transparency, improper governance of projects, concerns with data security or intellectual property are some of the numerous reasons why customers may lose trust on their offshore or nearshore SW service providers. All these reasons have led to the growing popularity of age old traditional in-house software development and also gave impetus to so called Domestic Sourcing.
It is good that local talents are also getting a chance to compete with the global software service providers but it is not feasible in every case. Sometimes it is still a better reason to outsource Application Development to an offshore and nearshore location for better business output. This is already described in our article “Outsourcing Software Development to offshore talent: a way to get help or hurt?”
On the contrary a company desirous of globalization and business expansion can never thrive solely on the grounds of domestic sourcing, in particular when you have very less talent in this domain available in your reach. Currently US companies seem more inclined to hire software developers and other IT specialists from within their local regions instead of outsourcing it to miles away to India, China and other Asian countries where there is abundant talent available at a cheaper rate. Trump’s new strict immigration and visa policies have added to the situation.
Due to this companies find it difficult in hiring talented IT professionals from offshore locations and will have to be content with hiring them from the homeland at a higher salary. This does not affect the big players like Google, IBM, Cognizant Technologies, TCS etc but will sure affect the interests of mid-sized companies who may be incapable to hire top developers within the states as they will be already taken away by the big giants leaving them to the hands of fresh, yet inexperienced talent. Best way here is to use a mix of both onsite and offshore Software Development models.
All the above factors have led to the emergence of tools available in the form of SaaS (Software-as-a-Service). One example being the pliXos Outsourcing Director aiming at an automation of the governance of SW development projects with remote teams.
Fig 1: Automation in project governance of SW development by pliXos SaaS Outsourcing Director
Other tools focus on helping customers and prospective companies to evaluate the suitability of a provider for software and IT services at offshore/nearshore/onshore and on-site locations. A clear mention of such a tool came in an article from newkerala.com. The article reads Rural Sourcing Inc. (a US based leading provider of IT Outsourcing service) unveils TCO Calculator to Demonstrate the Value of Domestic Sourcing.
The TCO calculator as explained in the article not only calculates Total Cost of Ownership(TCO) of a software but it can also assist their clients and prospects in benchmarking their software development outsourcing while considering variable such as H1B visa reforms, language, and cultural agreements. According to the article, TCO calculator provides accurate total cost that the customers will have to bear for their software development outsourcing requirements and compares these rates with other service providers as well as their own country providers pertaining to distinct and most commonly accepted productivity factors.
Offering online simulation of real business cases is one of the focus of the pliXos Outsourcing Advisor, devised by a Germany – based expert in Global Sourcing and Software Outsourcing. The Outsourcing Advisor allows immediate and flexible analysis of all relevant aspects of a global SW or IT Outsourcing project via a web browser considering all the major factors that contribute towards a successful software development outsourcing through
- Assessment of Global Sourcing suitability of SW and IT services
- Evaluation of service providers
- Business case analysis of Global Sourcing projects
Fig 2: Excerpt of parameters customers can utilize for real life outcomes by SaaS tool Outsourcing Advisor
The Outsourcing Advisor allows customers and prospective clients to analyze complex business scenarios by taking into account all relevant parameters and provides accurate data for decision making process. Not only this, the Outsourcing Advisor gives information to the customer and prospective clients about the tasks which should be outsourced and which should not.
Like this pliXos has an innovative approach in helping the customers to find best possible solutions for their IT outsourcing plans through its B2B Marketplace integrated with tools like Tender Manager, Outsourcing Director and advisory services thus providing automation at maximum stages of Software Development.
Fig 3: Vision of fitting set of SaaS tools for high automation in global multi-sourcing governance
As we all know that global sourcing of IT & Software Services in a globally distributed environment is facing significant challenges in today’s competitive environment. There are many reasons to consider when you decide to outsource Software Development or IT services and other technical jobs to Offshore/Nearshore/Onshore location. With the evolution of Internet of Things, Digitization, Machine Learning, Artificial Intelligence and other new technologies a disruption in IT services and software development models has taken a shift. These changes in business environment and globalization have led to diversification in the way Software & IT Services are procured. Moreover outsourcing IT/Software services for just cost benefits is a thing of the past.
Today there may be many reasons for customers to choose one SW service provider from plenty available for example, geographical location, past experience in handling complex IT Projects, cultural dissimilarities, language barriers, transparency etc. These reasons affect the project delivery and quality of work that might have been agreed by both the parties in an Outsourced Contract for Software Development. Not only this, last two years have been very crucial and with the political influence on immigration and visa policies, and Automation mainly companies are facing challenges in bringing offshore talent to onsite for software development.