How to do it right - Setting Up An Offshore Development Center

Cost Savings
Cost savings can range from 30-60% depending on the type of work and scale of the ODC. In major offshore markets such as India and China significant reductions come from the lower cost labor, training and recruitment. Additional savings can also be made by the customer at home with a reduction in capital expenditure.

Increased Speed
ODC's operating in a different time zone speed up development time considerably particularly if a 24 hour work day can be established. For ad hoc projects that require a quick ramp up and ramp down, ODC's can prove beneficial as well as resources and space can be quickly mobilized. neoIT, a leading global services consulting firm stated that more than half of globalizing client organizations state that reduction in time-to-market was the primary objective for globalizing services. Shorter product life cycles, greater competition and faster return on investment are all market factors fueling the need for increased development speed.

Availability of Skilled Talent
While not so visible to a company? bottom line, an important value proposition is the availability of talent. This is becoming an increasingly key factor in selecting the right outsourcing destination due in part to the labor market saturation in popular outsourcing destinations such as India. A quick look at recent numbers of Computer and Information Technology graduates reveals China to have by far the biggest talent pool (315,537), compared with India (112,000) and the US (137,437). (2) Customers should look closely at vendor location and future availability of skilled resources when setting up their ODC.

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