The main objective of any business is to achieve their goal and succeed in its area. As Consultant Strategic Marketing Alliance i had an opportunity work more closely on many of the projects. I intent to share some of my observations and thoughts which i have gained from my experience and research.

In today’s competitive world each and every company is in a race to grow faster and compete with each other, for products companies are trying to follow different product diversification and positioning methods to project their products are different from the other available products. When it comes to technologies and services they will not be having that flexibility to reposition of their products and services. Even then companies tend to use different marketing and sales tools to project to the customers they get better compared to others in the market, and also increase the support services for the better response rate and customers sanctification. This approach works better for some extent of time but eventually in today's competitive pricing market it is very hard for those companies to find new customers and survive in the market.

In such cases the only option left out would be reducing the operating cost, most of us feel this can be easily done by outsourcing to the developing countries where you can find a pool of talented employees at a very low cost. Every one have different opinion about outsourcing work because of there are plenty of success stories and failure stories because of outsourcing. Companies and projects which were not able to perform even after having complete planning and structuring have pointed out this failure was because of lack of support from their outsourcing team, and it was a wrong decision which they have made.

As a consultant i was keen to know and understand what went wrong and why did the same outsourcing worked for many projects did not work on the other projects and helped them to reach their goals in a short period and the same did not work for the others. The result of that research made me to think that there was a key element missing in those projects which were failed. Below are the few areas which were not properly researched before outsourcing (based on multiple projects)

• You need to understand what you choose to outsource.

• Your choice of outsourcing vendor.

• Interaction with the development team.

• Control over the development/delivery team. 

The above are the key reasons for the failure of such projects, when it comes to intellectual security

A recent University of Utah business school article the authors concluded that "companies need to retain adequate control over specialized components that differentiate their products or have unique interdependencies, or they are more likely to fail to survive" IT best practice (by Jim Ditmore): Companies must control their critical intellectual property.

Now here is another question how can you reduce the operating cost by filling the above gaps and also securing intellectual property?

This is really important you need to concentrate on all the above factors to be successful and continue the same in the market. This can be achieved with a new business model Offshore development Centre.

This is not at all outsourcing, An Offshore Development Center (ODC) is a remote complement of your in-house staff. You can see it as a virtual department; a dedicated team of software developers who are located outside of your premises.

With this method, you can hire 2 or 200 qualified people cost effectively!

Advantages

• Large talent pool to choose from (technical and non-technical expertise)
• Retain full management control
• Greater control over project execution and management
• Equipped, secured, connected and managed operation
• Offshore cost advantage
• Short term contracts possible
• No a capital item on balance sheet
• If required take your team on-site for short periods (Project orientation, scoping, implementation, etc)
• Time-zone advantage suited to troubleshooting

Controls

• Confidentiality
• Security
• Communications
• You can perform daily/weekly Performance Audit of your team

This method can be used by any company, the only thing you need to analyse is to what work has to be done from your offshore team, and maintain effective communication between your on-shore team and your off-shore team.

In the next article i will explain about what are the factors to be considered in selecting ODC provider.

Please do share your thoughts and feedback on this article.