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Software Outsourcing: Legal Issues

Posted in Geen categorie

Software outsourcing is noticed widely essentially taking place in all size of business segments. The outsourcing companies coming in relation to the developing call canters and Information Technology firms, of course, play major roles in India. The relation grown with such firms has effectively reduced the costs and there is an easy access to skilled workforce that may not be available onshore. Software Outsourcing processes often involves some greater risks to customers, which could be compiled in four categories:


·         Poor infrastructure

·         Data insecurity.

·         Inefficient economy

·         Political instability


 There are some greater risks involved in business which we have tried to cover in this article briefly from the legal perspective with some attempted identified solutions.




For offshore software outsourcing, it is necessary to consider, if there will be any additional or extra tax considerations, in particular to offshore outsourcing VAT implications and taxation liability are present. Countries, like India, also have favorable tax laws which could benefit outsourcing companies; therefore the local tax laws should be investigated properly by the tax specialists.


Change control


It is always advisable to justify the level of investment by both the clients and the vendors, because both the parties normally look forward for a long term relationship and contract. Though, in most software businesses, the technologies and the client's needs are constantly changing and developing over the contracted terms. So it is necessary that any contract has to be flexible and dynamic enough to cope with these issues. To avoid such problems it’s always necessary to have a robust change control mechanism, and should include procedures for proposing and accepting changes and their impacts on the levels of servicing, pricing and so on.


Relationship and Performance Management:


Outsourcing companies’ important issue is to ensure that the vendor is taking care of cost, effectively and efficiently for the duration which usually converts into long term relationship. In software outsourcing, if vendor remains competitive, then it’s Benchmark in Offshore outsourcing.



Local law


The international aspect specifies an expression in provision within the contract, as every country is having different law applying (governing law) and also where the disputes can be heard. It is probably advisable to give jurisdiction to both the English courts and the courts in the offshore territory as there may be circumstances where proceedings would be best brought locally.


Quit scenario:


 Offshore outsourcing ends when the clients may have to deliver the services from the onshore to the offshore vendor again. Exit or quit from any outsourcing arrangement is fraught with challenges, which can be magnified in the offshore scenario and a detailed contractual provisions are also developed to ease this process. The employment law of the onshore outsourcing company will also be considered with all the practicalities.

13:18 - 24/2/2009 - comments {0} - post comment

Software Outsourcing, Rolling Sector in India

Posted in Geen categorie

Software Outsourcing is one of the rolling sectors in India. So many entrepreneurs have helped in driving the growth of Information Technology in Software Outsourcing in India. Indian software outsourcers have fueled their growth by emphasizing on low costs and high quality, which are the basic and foremost requirement in offshore software outsourcing.


Software Outsourcing — now a days hiring outside companies to perform certain tasks such as developing software programs and handling customer call centers — has become a basic condition of survival for technical companies worldwide. There are not many top executives on the planet today who do not want or wish to offshore their information technology requirements. So it tells that offshore software outsourcing is one of the prime requirements for today’s world of information technology.


Researcher has found out some of areas in which still offshore software outsourcing grows rapidly; and they are seeing the growth across the board in all service areas, particularly in consulting, business process outsourcing (BPO), enterprise and certainly in our traditional core business of application of offshore software development services. They think that the biggest challenge that India have mastered so far is scaling business across geographies, industries, human resources, technologies, systems and methodologies.


Other things than this in offshore software outsourcing industry is the high turnover as job-opportunity for programmer. So attracting and retaining employees is something on that work hard at every day to become good software outsourcing development India.


On the other hand, large Indian companies will be able to grow into strategic consulting by adding resources to their business environment. The challenge is not about adding cheaper offshore staff in spite of software outsourcing to supplement existing practices, but about incorporating offshore resources and (service) delivery expertise into the company's current structure.


Our Indian offshore software outsourcing model has shown that almost every possible IT services can be delivered using the global delivery model of software outsourcing. The offshore software outsourcing has really changed the game from low-cost positioning to high-quality services and process expertise. It's a battle of business models.


Project offshore software outsourcing has been a major factor for several companies for choosing India as their prime destination. A company, by virtue of offshore software outsourcing its projects to INDIA, gains this valuable tactical advantage over companies that do not outsource their projects from India. Additionally this also works out for a few financial benefits too. India’s partner offshore outsourcing company can utilize the highly resourceful manpower of India for bringing in value-addition, hi-speed and innovation to their projects. The presence of an efficient, effective and highly established communication media with latest resources being available round the clock makes it very easy for the software outsourcing partners to keep the track of their valuable project anytime.

12:01 - 20/2/2009 - comments {0} - post comment


Posted in Geen categorie

The company is able to focus on its core competence through R&D which has taken its place-value at all software outsourcing companies, from software programming to the back-office processes, to all the spheres of competitive pressures inevitably to increase an activity to know the better world.  R&D has always been about competence. They have skills to change the world by providing their special services to the outsourcing India.


we find that, a number of service provider have moved upstream to invest their profits in developing entire devices or designs that are offered to customers who can add that magic.  The entrepreneurs are thus confident to sale their product in their brand name, looking at the consumers needs.


The outsourcing development industry is ahead with the outsourcing curve and competitive and cost pressures have created a service provider that caters to the needs of the industry. It could be any of the consumer needs, telecom or any pharmaceuticals production, the value of the dollar is driven out to good extent.


Identified Stars!


R&D has identified the rising stars for outsourcing development India which has become model for the American companies as source. The products manufactured in Chine, is brought for offshore at India and results in huge range to the world markets.


Wipro division is one of the upcoming industries, with the world's largest 'lab-on hire' with almost 10,000 software engineers. These programmers possess all the technical skills relating to Informational Technology with sound understanding about the telecom, storage and peripherals, testing, qualitative analyses and assurances, and many more.  It’s a Bangalore-based company looking forward to an in-depth strategy partnership role- from doing contracts as partners and invests in process methodologies and regional market insights across Asia, America and European countries.


A dollar a minute! Crucial


As we all are aware about the cost-savings are a part of the outsourcing development India, but the outsourcing should also foresee the time-consumed to market for client companies. Yes, it is definite that outsourcing product can save a company from $2-5 million, providing an opportunity to earn cost revenue. The product has to reach the market at definite time, to gain higher revenues. The design and strategy used in such fields are almost similar at every other place all over the world.


Time is crucial for the product companies to avail higher earnings at potential rates. So they are ready to outsource their products to all the field of offshore development. The companies that offers reduced investments in quality processes, has found favor of the customers.


Generation Next!


Outsourcing development India has reached to such an extent that the resources available are never out of reach to the consumers demand. They are keen on getting into end-to-end product development. The royalties paid by the client's company to such demands are much higher than expected.


The well-renowned companies know the market and are foreseeing the determination for specifications for a product that will be entirely developed by the supplier. The focus is on developing new products. There is joint risk-reward nature in the relationship. It is seen that there is a big acceleration and the demand and opportunities in this business is good. So it is indeed seen, that the core competence shall always remain for outsourcing development India.

16:27 - 19/2/2009 - comments {0} - post comment


Posted in Geen categorie

Software Outsourcing has become an increasingly common practice, every young across the globe is looking for a bright future in offshore/ outsourcing firms.


 Offshore Software Outsourcing is a seat between the two companies that manages the commercial and operational relationships. Earlier we use to focus on the development of the product and how the product could be sent to the software companies, but now there is an extension form of offshore outsourcing. Many factors are considered before even deciding to offshore outsourcing.


How much will outsourcing cost?

How long will it take?

What are the leading practices required?

What are the economic risks?


Software Outsourcing is one of the developing sectors of technologies and has learned and progressed with many methods and practices by all the majors of outsourcing. It has been giving better Information Technology services with best of the IT professionals world-wide. Their chief aim is to never reduce direct costs, but provision of better services with high productivity in greater value.


The researchers have found that the outsourcing partners usually have goals other than high-quality services in mind.


For the Software Outsourcing to contemplate on outsource, it is essential that they look after

 their own people. The smartest of the Offshore Software Outsourcing miss one of the most important considerations-the human cost of outsourcing decisions. The best case could be seen in a scenario, where there is a decent communication between the management and the workers, then the workers are able to keep up their job smooth and developing. Their will be more achievement of the productivity and the human cost is lessen accordingly. The real key to a successful software outsourcing relationship, is making the outsourcing staff a part of the team so that they really understand the goals of the engagement and can be proactive to the fullest.


At such a time Offshore Software Outsourcing keep hiring more IT consultants who can help the outsourcing company to execute the complex project filling with vital resources and skill gaps when the major project is underway. To speed up with the complicated projects assigned, Software outsourcing companies are now clear with their objectives to meet reasonable deadlines, with total support of the executives and all the tools, accessibility and respect taken into account.


The researchers have found that there are best leading practices to be carried out by Software Outsourcing companies all over the world to avoid risks when sensitive information is transferred to or shared with a vendor. Some of the practices adopted by the Offshore Outsourcing are:


  • To appoint a high-level officer, for evaluating vendors, for the security of the integrated information and privacy to meet corporate policy and legal requirements.


  • Balance sound information security and privacy risk management against economic (cost minimization) objectives.


  • Provide good faith disclosure to customers about software outsourcing risks.


  • Site evaluations when appropriate by considering independent audit will result in performance.


Software outsourcing needs to be handled properly as it is in huge demand and is posted in profitable propositions. But professional organizations like outsourcing software have become very much cautious these days.

16:48 - 18/2/2009 - comments {0} - post comment

Project Management in Software Development

Posted in Geen categorie

The Offshore Software Development Company keeps the Outsourcing Company informed about the progress on a regular basis for safeguarding the development process. It is necessary in Software Outsourcing both parties need to follow a communication methodology, wherein they acknowledge mails immediately and also ensure that emails are not lost or left unanswered. This email communication plays a vital role as most of the dialog between the engineers and the client is done via this mode. It is found out that communication between the Outsourcing partner and the Offshore Software Development through document sharing, intranet sites or certain chat-group-ware like ICQ is the best means of checking and solving technical problems.


Engineers from the Offshore Software Development Company ask questions and get answers to get a full understanding of the project via chat to make all the specifications clear. Good specifications made by them lead to result in good quality software and considerable savings in time taken to complete projects within deadline.


In the specific case of research, or when the Offshore Software Development Company actually produces the specification, the process of course has to be modified to suit actual requirements. It is believed that a project should start with a meeting or an email-dialog between the parties, to define the business problems and the software solutions. What is chosen depends on what the client is comfortable with and also on the nature of project. For small projects email dialog might be sufficient. The Offshore Software Outsourcing Company should submit a proposal work with both non-binding and binding estimates, fixed price and running hours. 


After Software Development success, the Indian government looks at software exports as one of their key growth areas and has set up an environment, which very strongly discourages any and all forms of Software Piracy and theft of software in India. INFAST is responsible for policing and tracking down any software theft, and formulating policies, which act as a strong deterrent for personnel and companies. Make sure your Offshore Software Development Partner signs an Intellectual Property Right Pledge and a confidential statement or non disclosure agreement as part of the initial stages of your partnership.


Some problems might occur if both parties are not aware of how the Offshore Software Development process is done. The main problems are Quality discrepancies, Lack of a repeatable process, Language and cultural barriers, Time differences, Technical communication problems, Skill mismatches, Security problems, Bad management and hierarchical inflexible organizations. Sometimes the Outsourcing Company overlooks these risk factors, thinking that the cost savings is so high that these risks are well covered. But in reality this can be a major trap. All of these can be rendered, by choosing the right Offshore Software Development Partner and working with proper and proven project management processes evolved during the earlier Offshore Software Development assignments.

16:53 - 17/2/2009 - comments {0} - post comment


Posted in Geen categorie

Big- name software companies are now targeting outsourcing small businesses to prove their products and can fit into entrepreneur’s budget. We would have never heard of this change earlier, but today is happening in high speed. The time has gone when the big-budget software industry, used to seek outsourcing small businesses. The entrepreneurs want their budget to be lower down, and are keen looking at the performance of the small businesses.


The small-business software market is sharp spot in such a weak technology economy. Some firms, like Microsoft, have already saturated other markets, and they see small businesses as a new revenue source. This area of the market is seen as a huge untapped opportunity.


There is more functionality seen at a lower cost and there are more companies emerging as they are the ultimate small-business solution. The small business is under served because it has traditionally been hard to reach. Sales costs can be high and average sale price is low, which squeezes margins. Only the most efficient software vendors can really survive in such a tough situation. It will be a challenge to find out the right small business to give you a reliable performance.


Those companies that will be successful are designing solutions specifically for the needs of smaller companies, and then delivering the software as a service. But the big companies are not yet sure of how much this idea of small business is going to be successful. As the giant company gives diverse offerings, the lack of focus in particular market will make it difficult for the company to truly understand the needs of the small businesses.

12:22 - 17/2/2009 - comments {0} - post comment

Offshore Outsourcing picking Pace

Posted in Geen categorie

Offshore Outsourcing is allowing a firm to identify and focus on its core competencies and natural resources of their own. The organization can outsource every other task that can be taken up by outside vendors and that requires significant time and energy. It will give the opportunity to the company to fully concentrate on its core competency. The low cost factor is equally important. In the form of cheap and skilled labor, manufacturing or production of the goods one can save in cost. This in turn is a result of variation in salary structure across the globe. The companies in America and Europe by Offshoring their jobs in Software outsourcing by countries like, India benefited of huge profits in terms of cost saving and quality. In business too Software Outsourcing has tail of ethics attached to it.


Business Process Outsourcing is a very mushrooming phenomenon these days in the world of Information Technology. Offshore Outsourcing is defined as the accomplishment of a business task from some outside agency or vendors. Furthermore a company can ask or hire an external agency to maintain its old records and accounts and competitive advantages. A decade ago, the phenomenon of Offshore Outsourcing was not so well established. Initially some of the relatively small and low grade jobs were outsourced in USA. Gradually with the budding success and confidence, valuable and crucial jobs like payroll accounting, human resource tasks - recruitment, training and Software Development  the business of Offshore Outsourcing has emerged with pace. 

Offshore Outsourcing work often involves the ones, which need to be performed on a daily and regular basis. Hiring of a consultant company for training of new employees, getting advertisements made from an advertising firm across the seas, this kind of job are not performed by the companies. So because of the changed scenario the firms opt for the Offshore Outsourcing.


Offshore Outsourcing is proving worthwhile and beneficial during the slump period of country's economy. Offshore Outsourcing is perhaps the best way to mutilate the costs without compromising on the good quality of work, when profits are under threat and it becomes imperative to reduce the costs. Business Process Outsourcing also urge to liberate big companies of labor oriented problems and issues. The sectors like financial sector, Information Technology, Telecommunications, Advertising, Courier Services and Customer Support Services in which Offshore Outsourcing is holding grips.

Offshore Outsourcing process is not acceptable to everyone due to its complementary disadvantages at the same time. It is believed to create an acute unemployment for the qualified professionals of that very nation. People often believe that Offshore Outsourcing leads to drainage of jobs from their own country. The companies also do not get to confront or communicate directly with their key clients which makes them all the more dependent on their offshore agencies. However, the threat of delayed failure of work to meet the deadlines and targets and most importantly leakage of confidential information is always lurking and lacking in Offshore Outsourcing and Software Development Overseas.

18:37 - 16/2/2009 - comments {0} - post comment


Posted in Geen categorie

Software outsourcing provides a number of offshore outsourcing models which are different and suitable to the needs of the clients. They have their own values and merits. Well the significance of the software outsourcing models is to reduce the cost of the project, to gain a lot of valuable advantages over the others, better turn around time, access to diversified pool of skilled professionals and addition of value in terms of speed and accuracy, innovation and quality by increasing the efficiency of project management and provides the same or improved quality of the project. At software outsourcing, there is flexibility, and so there is a perfect chance to try different variations and discussing the various aspects of the software with software outsourcing companies.


Some of the models that could be delivered by the software outsourcing companies are:

Offshore software outsourcing models

Offsite software outsourcing models

Onsite software outsourcing models

Offshore software outsourcing models


The Offshore software outsourcing model offers the major benefits to medium to large sized clients in terms of price performance and cost effectiveness. The lab of offshore outsourcing models are where the team of outsourcing distributes between the onsite and offshore locations. To meet the client’s requirements, a unit of the project team visits client’s locations for carrying out tasks at onsite. The team of offshore focuses on testing, application development and maintenance initiatives. The model works best when the knowledge transfer is for more long term or the applications are more complicated and there is flexibility in turning around time. The offshore model is more cost effective than the onsite model in all the possible aspects.


Offsite software outsourcing models

In offsite software outsourcing model, services signifies considerable savings in terms of the client’s infrastructure usage and management resources. In offsite mode, the vendor provides services from their own location in the client’s country using their own infrastructure and resources. In this model one gets the virtual extension of the client systems available to the offshore team and strategic pricing which are the main benefits realized with the offshore lab model.

Onsite software outsourcing models


The onsite software outsourcing model is the model where the whole outsourcing team is located at clients site. This model works the best for complex applications with frequent user inputs, evolving standards and frequent changing requirements. For meeting the short-term and specific requirements, onsite consultants work at client premises under the direct supervision of client managers, where the entire outsourcing process is located. Here the complete effective project control and maintenance which includes analysis, review, installation, user acceptance testing and all possible needs of the clients. This model also works best for even complex applications with evolving standards, frequent user inputs, and changing requirements.


These are the few samples of the software outsourcing models which tends to change on the working environment of the vendors. This also depends on how much the vendors are flexible and negotiable with their prime and valued clients in the challenging and competitive world of IT software outsourcing process.

16:50 - 11/2/2009 - comments {0} - post comment

How to Deal as a Mature Offshore Outsourcing Marketer

Posted in Geen categorie

As Offshore Outsourcing continue to mature and to spreading into the every possible corner of the world, organization need more sophisticated management models to understand this phenomenon and take full advantage of it.


            In present time it can easily be seen that almost all organizations are to increase their investment in outsourcing both IT operations and business processes. But evidence also suggests that both clients and vendors are becoming increasingly adept at addressing the fundamentals needed to develop a lasting relationship as the Offshore Outsourcing marketplace is maturing very rapidly.


            It can also be seen that buyers of Outsourcing services are more knowledgeable and techno savvy in scoping and negotiating their deals. Experience has taught them that it’s of no use to simply signing up for the lowest cost but to get the business done in the most positive and efficient way. Though cost remains the only most important factor in almost all deals, clients are also looking for the best possible combination of price/performance.


            As far as vendors are concern in Offshore Outsourcing, they are also looking for something more then just “Buying the Business”. They also know that it is always going to be useful to gain a contract with no profit, rather then loosing the contract for a low margin of profit.


Business for the Mutual Benefits to Both!!!


It is always necessary that there should be proper understanding in Outsourcing deal between both client and vendor. The Outsourcing deal can only be considered to be successful if both the vendor and client benefits out of it.


One of the most important factors here is the Negotiation power of both parties. The ideal approach to Outsourcing negotiations is to take the time needed to get it right the first time - by understanding what is to be outsourced, and by specifically defining expectations from the outset.


The proper pre-outsourcing assessment of an existing environment typically takes around 3 to 3.5 months to complete, and needs the following to be performed:

  • Always identify existing services and supporting processes
  • Try to find out anticipated and current services levels
  • Defining Projected and Current costs
  • Keep the track record of anticipated and current volumes of service
  • Understand the work and functions of both vendors and clients
At the End: The most important thing to gain success in Offshore Outsourcing is to understand your current world.

13:11 - 11/2/2009 - comments {0} - post comment

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Recent Entries
- Software Outsourcing: Legal Issues
- Software Outsourcing, Rolling Sector in India
- Project Management in Software Development
- Offshore Outsourcing picking Pace
- How to Deal as a Mature Offshore Outsourcing Marketer