Offshoring and outsourcing service models are continuously evolving as service providers and clients mature.
The inclusion of development centers that are in close proximity to client locations as part of the service model is becoming increasingly attractive as service providers adapt to the need to improve their collaboration with client stakeholders, while remaining cost-competitive through a target onsite/offshore ratio. Having resources at close proximity is a win-win for both clients as well as service providers:
- Clients get the benefit of lower cost when compared to on-site resources, increased face time with resources when compared to offshore resources and the ability to collaborate closely during key project phases as needed to ensure success.
- Service providers get the benefit of having a collocated pool of resources that are deployable across multiple clients and are able to learn from each other, are able to tap into college hiring to keep cost structures in control, and are able to reduce their dependence on visa-based resources to fulfill their onsite needs.
This model can be very effective in specific scenarios. For example, application support and maintenance engagements are well suited to this model as on-site presence can be planned and scheduled in advance around key deployment or change milestones. Day-to-day tickets can be delivered by resources based in centers that are in close proximity to the client location in combination with offshore centers. Similarly, most projects with predictable milestones and mature processes can be executed effectively from such centers, with as-needed on-site presence to ensure effective collaboration.
When compared to a pure on-site model, resources that are based at these development centers are able to learn from each other, training and mentoring becomes more cost-effective given the resource aggregation, and typical issues such as vacation, resource attrition and rotations are easier to manage. It is also easier to build a better trust-based relationship with client stakeholders because of the increased face time and collaboration, and such teams can be seen as an extension of their own local resources.
These considerations are driving us towards increasing adoption of a hybrid outsourcing model which includes a few key high-contact resource roles on-site, some resources based out of development centers that are geographically close to the client location and some resources at offshore centers.