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Outsourcing Central |
Offshoring ROI
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Not too long ago, CxOs realized the importance of optimizing IT budgets to improve business performance. And the first component that was targeted for cost optimization was Applications Development and Maintenance - understandably so, because huge spends going into maintaining enterprise applications (or developing products in the case of ISVs). This is when offshoring was born, and the very same tasks of developing and maintaining applications could be done at lower costs.
Since then (about 20+years), offshoring is in practice and this strategy has come a long way. Today no industry vertical is untouched by this phenomenon. From small to large enterprises, companies are either using it or are actively thinking about it. It is believed that today, more than 60% of enterprises in the US use offshoring to cut costs and a major portion of savings come from applications development offshoring.
Because of offshoring, companies are able to reduce development and maintenance costs by at least 25% and even to the extent of 70%. Now that every enterprise practices this strategy, this cost advantage is no more a competitive advantage. In fact offshoring is now a MUST HAVE, or else you are out of business even before you are started. A 40% cost saving is a huge benefit and is critical to survive the competition.
But the cost benefits of offshoring do not end here and it is imperative that enterprises do not judge ROI on lower labor cost alone, but on total cost of owning the product or business software. If initial success has been found with offshoring, one should think about additional business value by way of better productivity, reduced time to market, even better service levels, enhanced customer satisfaction, technology advantage and strategic consulting contribution from offshoring. In short; "total cost" and not just "offshore labor cost".
BrickRed believes that once you are successful in setting up an offshore delivery capability, you should take the following 4 pronged approach to maximize your offshore benefits –
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Scale to Maximize
Do not limit offshoring to just a select few components. |
- When successful with the offshoring strategy do not hesitate to maximize by sending more work offshore and reap more benefits of cost, productivity and enhanced performance levels.
Economies of scale always work well and will always help in attracting more competitive rates from offshore provider company.
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Think Objectively
Set targets for the provider to over perform |
- Set goals and incentivize the provider for performing faster and better. Put in place metrics and incentives for achieving results adding value to business.
Incentivize your provider for maintaining a disruption proof delivery and maintenance capability and not just limited to maintaining a high caliber workforce.
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Rationalizing Applications
Can the total cost of maintaining your product/applications be lowered? |
- Your applications/products invariably tend to become complex as they become larger and older.
It is important to always keep an eye on the future support needs and thus it is important to rationalize and simplify your applications and product architectures and hardware needs regularly; thus lowering total cost of maintaining such applications/products.
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Relationship
Offshore Provider is not a vendor but contributor to your success |
- Most companies consider providers just as vendors and do not benefit from the immense experience of providers.
Case studies show that providers can hugely contribute in shaping your offshoring roadmap through their technology insight and focused and experienced workforce. This is only possible in a partner-centric approach and not a client-vendor relationship.
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Free Trial
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Try us for free by giving us a small piece of work and evaluate our Capabilities, People, Processes, Communication efficiency, Code Quality & Delivery Time without risk and choose to award us your business. If we do not meet your expectations, you simply do not get invoiced for that period. This is our written contractual guarantee with you for the entire period of our engagement. Moreover, you and only you decide whether we have met your expectations or not. Period!
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Our Zero-Invoice Guarantee
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BrickRed provides a ‘one-of-a-kind’
rock-solid contractual guarantee for all its
services:
Guarantee
Statement
If we do not meet or exceed your expectations,
we simply do not invoice for that period.
Guarantee
Meaning Expansion
As per our written contractual guarantee, we
need to – at the minimum – meet
the expectations (timeline, quality) that we
have agreed upon with you. We track the performance
against these expectations on a definite frequency
and if we have not continuously met your expectations
for 2 consecutive times, we send you a ZERO
value invoice for that period. It’s that
simple.
How
it works – the process
Our Clients recognize that
is a rock-solid guarantee that no one in the
industry can match. This is a clear indication
of the confidence
we have over our people, our processes, our
communication and the deliver management.
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To know more about BrickRed' Guarantee please click here contact@brickred.com.
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