Offshoring is a business reality, we know that. And as an organization, you have either started the process or are planning to. But you don’t know what and how offshoring works. The offshoring market is now a very mature and different kind of models have been successfully implemented. This article would be focussing specifically on models that would work for Small & medium businesses (SMB).
Offshore delivery model
The offshore delivery model is typically associated with companies that need additional resources. This offshoring model could be defined as the process of executing IT projects with the help of resources located at one or more offshore locations. The teams executing the task would be located at an offshore location. The client could have a team onsite and would use the offshore resources in a staff augmentation role.
Global delivery model
The global delivery model is typically associated with companies that have a more strategic focus on offshoring. This offshoring model could be defined as the process of executing projects with the help of outsourced resources located at the client as well as offshore locations. The teams might be located at the client site or at a remote site
The Captive unit is typically associated with companies that plan to, or already have a significant offshoring presence. This offshoring model could be defined as a remote office which is a subsidiary of the parent company. The offshore teams would be located at the client’s offshore office.
The Build Operate Transfer Model (BOT) is associated with organizations that, in the future, would like to have a captive unit, but want to outsource building up the organization. They would typically start with either an offshoring model or global delivery model and have agreements in place to move into a captive unit with the resources either after a certain timeframe or after reaching a specific resource count.
Joint ventures & Onsite delivery models are other popular models, but SMB typically is not the right fit for these kinds of models.
You should evaluate your business needs before selecting the model you wish to proceed with. Choosing the wrong model is very expensive to revert. If you don’t have the experience, reach out to professionals who can help you figure out what the right model is for you to implement.
Also, don’t forget to follow my article on the first steps to offshoring.
Covalnz Advisory services is a consulting firm that works for Small and Medium businesses to help find the right IT partners to source globally.