Outsourcing the right way: Building trust and predictability by software outsourcing

Dec 04, 2008

If the worldwide financial crisis has rendered the issue of IT outsourcing redundant, meaning that the outsourcing method is now a universal tool available to every company looking for cost reduction while maintaining good quality services, secure business development is essential to preserving core integrity. In this way, maintaining or, moreover, increasing business predictability is fundamental to ensuring a profitable outsourcing transaction.

According to Everest Research, in the first quarter of 2008 more than a third of all outsourcing deals were signed by European companies, most contracts for IT and business processes outsourcing, while a Market Vista report showed that the credit crisis and recession did not have a significant impact on Eastern European offshoring industry. As such, while about 12 large suppliers expanded their operations concentrated in India, the Philippines, Czech Republic and Romania, the latter two countries offered an increased predictability as part of the Eastern Europe former block.

Romanian economy, as recent part of the European Union, is still developing , providing outsourcing companies with legal tools and the appropriate framework for building up an offshore branch with the trust and reliability they need. It's easy to observe that in large offshore locations such as India the outsourcing business might be affected to a great extent due to the increased dependability that exists between Indian economy and Western climate. Because India pulls out an annual rate of 800,000 IT engineers, instability is expected to rise due to Western companies that are reducing or moving their offshore businesses all together. In either case, closer cultural and established offshore locations, like Romania, are expected to further increase their outsourcing market share in the following years.

Predictability can be considered when taking into account the local political and economical circumstances of an offshore outsourcing destination. Romania is highly influenced by the European Union conditions and principles, because it receives nonrefundable development funds that need to be proper implemented, while fulfilling special social requirements. Benefiting from highly skilled IT students, software Romanian companies can provide high quality software development with reduced transactional costs. With local IT providers, companies need to invest in training, and moreover maintaining incentives for productivity and low turn-over rates. Although outsourcing has been accused of ill-behaved customs, reducing workplaces in your own country, taking advantage of third-world nations, things are looking differently in the light of the new financial crisis.

   1. Small or medium sized IT Romanian companies are self-motivated to bring innovative and competent software solutions to outsourcing clients. A good and timely delivery and a satisfied client speak more by themselves than any expensive advertising strategy.

   2. Due to the high competitive environment, Romanian companies, like Software Business Partners Romania, are constantly training their young employees into the latest software products and tools, such as the various .NET platforms, or extend their expertise in the vast array of Microsoft development environments, for both desktop and web programming.

   3. Although the software development and consulting services that SBP provides cover the entire product life-cycle through online issue reporting, bug tracking and feature requesting system, when the project is finished and the solution delivered the outsourcing relation is not over, the company maintaining successful offshore relations with several clients from UK, US, Germany, which is to say that additional prior investments for new projects are not necessary from the outsourcing client, because the infrastructure basis already exists. It's easier to keep an outsourcing relation with the same provider, because it gains higher understanding about the client needs and expectations.

So outsourcing is not a "one-night stand", contrary to most popular beliefs. By outsourcing, companies are maintaining an acceptable level of productivity and quality, and are thus able to focus on building other concepts, creating new branches in their local networks, offer to their national customers diversity and quality products at affordable prices. The global financial crisis is a fact, it can not be ignored or expected to pass by itself. Medium and large companies need to take decisions that will influence the local economy, but that will sustain it on the long term. In developing countries like Romania, an IT specialist paid with not even half of what the same person gains in UK for example, can still have a complete and satisfactory standard of living, because economy, although growing steadily, is at a different level than in industrialized nations.

In the new view brought by the global financial crisis, international relations and affairs might need to be tightened, because large wealthy nations can not stand more on their own. A broader perspective and relation needs to be built , that will include different regions of the world, different nations, different cultures. It's an exchange made of course for profit, but moreover for survival. Even small countries like Vietnam, El Salvador, Honduras, Dominican Republic are becoming aware of the benefits of building up outsourcing resources. International conflicts receive higher awareness, and although it's gloomy to notice that there had to be a global financial crisis to get countries closer, it's not hopeless to think that in a few years, when large economies will stabilize, something good will come out of it for most of the world.

Read more about it:

Outsourcing the right way: How can software outsourcing help you reduce your risks during the financial crisis? 
Outsourcing the right way: How can software outsourcing help you reduce your costs during the financial crisis?
Outsourcing the right way: Building trust and predictability by software outsourcing