Given all the impediments with the traditional outsourcing model, ranging from poor quality to delay in delivery time to other factors such as lack of control, there is a definite need for a new and sustainable approach.
While outsourcing is a traditional customer-supplier model, offshoring allows building a new business center or facility which is dedicated particularly to specialize in the product or service that you are looking to deliver. Offshoring can be done in the form of a parent-child relationship. For example, Microsoft has its offshore R&D center in Hyderabad, India. Alternatively, offshoring also provides a middle path by allowing ISVs to have a dedicated team and not a constantly changing outsourced team.
For small to mid-sized ISV business to truly achieve success with their offshoring endeavors, the recommended strategy is to engage a dedicated team from a reputable offshoring partner. Although, an effective and profitable business model, there is a lot of effort and hard work that goes in before you’re able to find the right partner and set up a dedicated team that is customized to your needs and then get them on board and on par with your in-house team. But, once you are able to accomplish this and set up an engagement with a reliable service provider that has a combination of both intensive industry knowledge and software expertise, you’re in for the long haul.
Here are the top five reasons for engaging dedicated teams is so effective:
Project Based vs Product Based Offshore Development: In a typical project-based scenario, an offshoring company provides you with software engineers to work on your project. However, these engineers can be moved to different customer teams as and when the need arises. So, each time the team members are moved, you would have to spend time and energy into grooming and training the new entrants in the team which would adversely impact your product roadmap. Having dedicated teams allows you to expand your operations and have a team committed wholly to your product throughout the various stages of its lifecycle. You would also have complete control of the team in order to ensure high quality, timely delivery and optimum peformance.
Control: One of the greatest advantages of hiring a dedicated team is complete control over the offshore team—from hiring the team to setting up processes and business hours. The team works exclusively for the customer who can supervise the resources and processes closely and ensure efficient workflow through project management and regular status updates and rapidly scale up operations, when required.
Cost-Effectiveness: With the dedicated team approach, there usually aren’t any fixed costs or hidden overhead costs. A dedicated team works in complete alignment with the client’s methods and expectations which directly ensure an optimal cost-effective output. And since the customer has access to highly competent, experienced and carefully selected resources, he does not have to invest much on training or fixing problems.
Quality: A dedicated team is directly hired by the engaging customer and all subsequent operations of the team are supervised directly by the customer. This level of control directly impacts the end product and its quality in a positive way.
Transparency: With the dedicated team approach, communication channels are kept wide open. Offshoring is no longer just shipping off a part of the development to an unknown, faceless team. Instead it becomes personal and lends accountability and responsibility. The processes followed are exactly as they would have been in-house and are determined entirely by the client. This approach offers the customer the liberty of aligning the culture of the dedicated team to that of his own organization and gives him flexibility in setting expectations according to company standards.
On-Time Deliverables: The team is entirely dedicated to your product and cannot be reassigned elsewhere and there is tight communication and collaboration between the team and the customer. These factors combine to mitigate the risk of delay in deliverables.
With the dedicated team development approach, it is understood that requirements cannot be written in stone at the start of the product development. It usually follows an agile approach which, in the long run, proves to be a cost and time effective strategy. If a mutually beneficial collaboration is put in place early on, engaging a dedicated team for your software product development can result in a win-win strategy for your ISV business.