The benefits IT can provide a company, independent of its size, are common knowledge, as are the rapid changes in the IT field. The effectiveness of outsourcing is also well documented.

1. Outsourcing Offshore: a Forced Trend?
The benefits IT can provide a company, independent of its size, are common knowledge,
as are the rapid changes in the IT field. The effectiveness of outsourcing is also well
documented.
It is generally held as a good idea to turn IT operations and especially IT development
over to external providers, as it significantly saves on staff, equipment, training and
maintenance, as well as it allows customers to concentrate more on business. However,
the lack of IT professionals in developed countries reached critical proportions, with
340, 000 vacant IT positions in the USA alone. This fact makes outsourcing increasingly
challenging and expensive. The solution is, therefore, to go offshore.
Offshore development is usually defined as the practice of moving software and other IT
work, such as project analysis, design, coding, testing, and maintenance from companies
in developed countries to software companies in low-wage areas. Nearly all of the
Fortune 500 companies use offshore development services or have their own branches
set up offshore. Major hardware and software giants like Microsoft, IBM, Apple,
Novell, Sun and Siemens have extensive offshore operations. Many of the world's
famous software applications are developed offshore, either partially or completely.
Offshore operations can provide a lot of benefits, including:
• Technical Competence: top IT professionals are available offshore and they can
work for you.
• Quality: customers can be assured that their projects will be done on time and
according to the highest quality and technical standards.
• Costs: customers are sure to save at least 50 per cent of all expenses if
development is done in-house, not even taking into account the expenses on
infrastructure and equipment.
• Start-up time: it is usually much easier and faster to start up a project offshore
than in-house. Besides, offshore companies can take projects at any stage.
• Protection: all intellectual property rights will belong to the original company.

2. Financial protection is also guaranteed as payments are made only when specific
milestones have been achieved. In addition, it is quite usual now for offshore companies
to offer fixed-price solutions on guaranteed deadlines.
There may be several obstacles as well.
Cultural differences, inadequate project management and communication problems are
among the most common. However, cultural differences and management problems can
be overcome by keeping a tight control over a project from the site. Offshore houses can
even adopt the standards and procedures of the customer's company. Communication
would not seem to be not a problem anymore: electronic communication and, if really
necessary, on-site support can solve it. It no longer matters whether the development
staff are located the other side of the town or the other side of the world. Offshore
companies are aware of these problems and they do their best to eliminate them, co-
operating with the customers.
You can outsource offshore many types of work such as client/server and Intranet
systems, advanced engineering and system integration, consulting and re-engineering,
customisation and localisation, testing and bug fixing, multimedia and Web design, data
entry, processing and conversion.
But there is another strategic problem: what is better, to develop a custom solution or to
rely on packaged applications? Of course, there is no universal answer, but whatever
your choice is, you should keep in mind that effective use of packaged software also
requires planning, consulting, system integration and quite often customisation or
enhancements. Again, you will need help and offshore companies could be a solution.
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Article Source: Web Space Station