Outsourcing to India - Service Wing Outlook

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© Service Wing Solutions Pvt Ltd

OUTSOURCING to India

A Service Wing Outlook

Abstract India is a successful outsourcing destination in the world of IT and IT-enabled services. This paper discusses both the benefits and the challenges in outsourcing and off-shoring.

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Table of Contents

INTRODUCTION ................................................................................................................................................... 3

INDIA AS PREFERRED OFFSHORE OUTSOURCING DESTINATION...................................................... 4

BENEFITS AND CHALLENGES OF OFFSHORE OUTSOURCING TO INDIA ........................................... 5

ENGAGEMENT MODELS FOR OFFSHORE OUTSOURCING TO INDIA ................................................... 6

ENGAGEMENT MODELS AT SERVICE WING ................................................................................................ 7

SERVICE WING DIFFERENTIATION: (NEED TO SUGGEST A NAME FOR XPLANNER) ................... 9

ABOUT SERVICE WING SOLUTIONS PVT. LTD. ....................................................................................... 10

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Introduction

The term ‘outsourcing’ refers to the practice of contracting out a company’s internal business processes and IT operations to a third-party organization, primarily to enhance internal focus on core competencies and reduce operational costs. This practice started in the late 1980s and gained popularity at the turn of the 21st century with special emphasis on offshore outsourcing (also known as off-shoring), which involves relocating parts of a business function to another country. Today, a majority of Fortune 100 companies and a multitude of SMEs of various size offshore parts of their IT operations and business processes. Following is a diagram from the industry’s leading outsourcing analysts firm Horses for Sources. The pie chart provides an estimate of the size of the outsourcing market for the year 2013, which is expected to grow at 5 percent per annum till 2017.

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India as Preferred Offshore Outsourcing Destination

Since the early 1990s, India has been riding the wave of offshore outsourcing. India accounts for 43 percent of the world’s IT services offshoring market (this is followed by the Western European Union at 12 percent) and 35 percent of the world’s BPO offshoring market in 2013. How India emerged and continues to maintain its dominance in the world outsourcing space has been spoken about quite eloquently.

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Benefits and Challenges of Offshore Outsourcing to India

Organizations have experienced significant benefits in outsourcing their IT and business process operations to India. The exact benefits in terms of cost reduction vary, based on the nature of the work being outsourced. For commodity work items such as established business processes or well-defined software maintenance, typical cost savings are as per the following chart (courtesy McKinsey). For items that are not well defined and influenced by unfolding business realities, the cost reductions will be less. In these cases, the additional costs incurred, related to communication with an offshore team and governance, will be higher.

Other significant benefits in outsourcing to India, besides enhancing company bottom line, are as follows: Quality and productivity of work output: Research has shown that work done by Indian engineers and BPO analysts, meets, and often exceeds, the requirements set by clients. Access to a technology-savvy, educated work force Ability to focus on core competencies while outsourcing the rest Enhancement in processes and operational efficiencies

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Engagement Models for Offshore Outsourcing to India The most popular engagement models for any outsourcing engagement (onsite, offsite, near-shore, or offshore) are Fixed Price (FP) and Time and Material (T&M). To summarize—the FP model works for an engagement with a tightly-defined scope and requirements, which are unlikely to change. In contrast, the T&M model works for an engagement which is flexible, adjusts to business realities, and whose scope and requirements undergo changes over time. Its upto client which model to select for a specific engagement Recently, a majority of new development projects in the software world follow the Agile model, which is a radical departure from the previous Waterfall model of execution. In the Agile model, since the requirements continue to evolve with time—a T&M model over the product development life cycle—with a fixed number of offshore staff usually delivers the best results. When the product goes into maintenance and support mode, again a T&M model will be in picture since the work content cannot be defined in advance. Typically, a T&M model assumes that the client has an extended team offshore; this team works as ‘virtual employees’ of the client. An FP model can work well in the context of a technology rejuvenation initiative like a stable and well-documented product needs to be migrated to a new technology platform. Client can freeze their budgets in FP model in advance so any deviation which may trigger a change request/customization with some cost associated can be avoided. Ultimately it reduces the client’s risk. A recent phenomenon has emerged wherein many clients (usually small companies) work with freelance software developers and testers. This is done through a online job marketplaces. This works for small projects per say which typically do not require a team and other credentials for the outsourcing.

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Engagement Models at Service Wing Pure Off-shore Model

In a pure offshore model, the entire delivery team from Service Wing is located offshore. The client interacts with the delivery team through well-defined interfaces, as depicted. Procedures are well-defined, and communication protocols for regular status checks, reviews and approvals, and escalations are put in place to ensure integrated operations between the client and Service Wing. This model works well when the project requirements are relatively stable and there is little or no connectivity required between Service Wing and the client’s business or client-facing team, or when the size of the offshore team is relatively small.

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Hybrid Model

A majority of the execution still occurs offshore, a smaller onsite staff is stationed at the client’s location—either for a limited period (at different phases of an engagement) or throughout the engagement. This model works well for projects which do not have well-defined requirements or documentation, thereby requiring Service Wing engineers to visit a client to perform business analysis or system architecture, and the appropriate knowledge transfer. This onsite team performs liaising and coordination of work between the client’s in-house team and the offshore team to ensure effective integration. This blended model also works well for some other engagements (not large) where the client does not have the bandwidth or capacity to manage an offshore team.

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Service Wing Differentiation: In-house developed project and task allocation

Service Wing has developed an in-house employee engagement model which is dashboard driven, guiding senior managers for project execution and task allocation to the respected teams. This system improves the efficiency at every level of offshore project execution from task-mapping to setting up an appropriate team hierarchy to time management, showing consistency in execution across projects, leading to predictable deliveries. The key parameters that a client looks at while selecting an outsourcing vendor includes quality, speed, consistency, responsiveness, scalability, and value addition. This effortless system provides comprehensive data to On-shore Account Manager as well as to Client Account Manager. This would surely not for the monitoring task; rather it helps internal and external stakeholders to look into the progress of the projects.

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Inception

•2009

Happy Clients

•40 & Adding...

Innovations

•7 Mobile Apps for corporate

Enterprise Level Projects

•7 & Adding...

Presence

•San Diego, CA

•Pune, India

About Service Wing Solutions Pvt. Ltd.

Founded in 2009, Service Wing Solutions is a leading offshore software services company offering solutions that accelerate, simplify, and enrich business processes to give its clients an edge over competition. Our array of services includes Product Engineering (OPD), Enterprise Business Solutions, and Secured Mobile Platform Development. Service Wing specializes in the implementation of the Offshore Development model. The Service Wing domain expertise spans across several business verticals such as Healthcare and Life Sciences, Logistic and Supply Chain, Banking and Finance and Hi-Tech. Service Wing has seven technology-focused Centers of Excellence (CoEs) – E-commerce, Enterprise Mobility, Customer Relationship Management, Enterprise Content Management, Education and Learning, Enterprise POS systems and Supply Chain Management. Our innovative model of engagement helps de-risk our approach and provides the best value per unit cost.

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