Offshore Delivery Models

Companies currently not engaged in offshoring cannot afford to disregard it as a part of their overall strategy. When they do evaluate it though, they need to very careful about picking the right delivery model. Choosing the wrong delivery model will lead to certain project failure.

Many vendors today are offering customers a blended model with flexible delivery alternatives through offshore centers located in countries such as China, Russia, or India, offsite centers in the United States, and onsite teams operating on customer premises.

Onsite teams. Some companies require the presence of project teams at their premises, particularly for mission-critical projects. The customer's team and the project team collaborate to develop requirements and goals that meet the customer's specifications.

Offsite centers. A key factor in successfully meeting customers' needs is being physically close to the customer. Offsite centers are located in the same country as the customer. Accordingly, vendors have expanded and improved the offshore model by establishing offsite centers in major markets. The belief is that the offsite centers allow vendors to respond quickly to customer requests, to interact closely with the customer, and to market services tailored to meet the needs of specific geographic markets. In addition, vendors staff offsite centers with locally hired managers, marketers, and technical associates, which enables them to compete more effectively with local service providers.

Offshore centers. Companies typically assign a team to visit a customer's premises and determine the scope and requirements of a particular project. Some members of the initial team remain onsite to facilitate direct liaisons with the customer, while others return offshore to establish and supervise a larger project team to implement the project. Typically, 20% of a project team will be onsite and 80% at an offshore location depending on the nature and complexity of the project.

Dedicated offshore centers. Vendors also enter into arrangements with customers in which an entire project team is assigned to a single customer. Such teams, called dedicated offshore centers, work from remote facilities and are staffed and managed by vendors. Once the project priorities are established by the customer, vendors manage the execution of the project. GE Appliances, Ford, and others have established dedicated offshore centers in India with Satyam Computers.

The bottom line: Companies need to spend a lot of time thinking about the offshore delivery model. Once a certain path is chosen, it is hard to change mid-stride.