Why go offshore?
The benefits are many and CEOs who moved early have already begun to realize them.

Substantial cost savings of between 40%-60% can be achieved by offshoring your IT application development and maintenance. CIOs are therefore selecting offshore service providers based on key performance indicators affecting the enterprise's competitive position.

Enhanced Productivity is another major benefit. Experienced IT-service providers are restructuring their offerings to accommodate tech-savvy CFOs and resource-constrained CIOs looking to offshore sourcing as a way to assure quality and lower application development and maintenance costs. With all the new models and expansion, CIOs can take some comfort that the traditional 'local', or onshore outsourcer, by buying offshore facilities and staff, is taking advantage of lower costs and higher-quality regimentation and passing those benefits along. The added benefit of time-zone difference can overcome the limitations of an eight-hour shift and create round-the-clock productivity.

Tax Breaks for companies providing IT services are most often passed along to the customer as well. This benefit of dramatically lower costs translates into boosting the profitability of software projects.

Source: Forrester Research, Gartner, Optimize Magazine

Determine what are the key questions you need to ask yourself for your software offshoring initiatives to be successful? How you should be measuring their success?

Key questions for successful software offshoring initiatives

Can my organization offshore?

What should I offshore?

What services I should not?

What sort of supplier/delivery model is right for my company?

How can I assess potential suppliers and whom should I work with?

How can I protect my organization with the right contracts, service level
agreements, reviews and measurement methods?

What if it goes wrong?

How can I expand the offshore service?

How much can I save?

What to look for in an offshore outsourcing partner

Creating and maintaining a long term relationship with an offshore services provider helps companies improve the performance of their own IT organization while reducing cost and improving the overall quality of IT operations.

• Technology expertise
  
• Vertical Industry expertise


• Supplier viability


• Price


• Previous successful service relationships

While choosing an offshore partner, also look for the following traits among the companies you shortlist:

Friendly to first time offshorers - the offshore firm understands your sensitivities. Especially when you are planning to use the offshoring model for the first time.

As a first time offshorer, you will have some unique challenges and concerns:

• Communication: offshore firm's capability to proactively communicate information on activities and decisions required by your project personnel
  


• Distance: offshore firm's capability to ensure frequent project coordination and status calls during US working hours-to make distance a non-issue
  
  
• Control: offshore firm's ability to provide executive-level reporting to
  ensure that you retain full control of your project
  
  
• Easy Transition: Transition made smoother by providing a flexible methodology, which is geared to maximizing the use of your existing, familiar processes and terminology



• Bridge culture and process gaps - offshore firm's ability to manage diverse teams and understand cultural issues



• Infrastructure suitable for establishing offshore centers - capacity in terms of floor area, seating capacity, work environment, communication facilities and other amenities
  
• Quality of processes - offshore outsourcing firm's quality standards - measurable and comparable with industry standards



• Maturity and stability of offshore operations - offshore firm's ability to mitigate risk, and past experience in providing offshore development to organizations worldwide



• Skill of resources on your engagement. The offshore firm's ability to hire and retain high quality resources through effective recruitment process, career planning, compensation and mentoring programs



• Flexibility to scale and shift resources as and when necessary. The flexibility of processes and methodology to adapt to your requirements



• Process and metrics driven organization. The firm should be committed to process, methodologies, and metrics management
  
  
• Capabilities & experience in project management. The firm has proven program and project management methodologies



• Global delivery model. The offshore firm should offer the optimal mix of resources spread across geographic locations