Outsourcing
Selecting an appropriate offshoring model is a crucial aspect of developing your company’s outsourcing plan. The process involves several factors, including aspects of international business strategy, selecting the country, scanning the landscape and deciding on the outsourcing strategy. The two models most popular currently among business leaders are joint ventures and outsourcing to a service provider. Astha has clients and partners operating in both the outsourcing models.
Joint Venture Offshoring
In a joint venture (JV), an organization ties up with a local firm or company either by taking an equity stake or forming an independent company in which each company contributes resources. The goal is generally to work towards a “win-win” deal where both organizations hope to benefit from the other’s strengths. By capitalizing on the strengths of a local player, the client organization can mitigate some of the risks of internalization; similarly, the local player can benefit from partnering with a strong player and the opportunity to scale up the value chain. There are several advantages to a JV model, especially if the company is also looking to “learn” the intricacies of managing local business customs and mores from the domestic partner, which will pave the way for a subsidiary down the road. At present, Astha has one joint venture partner based at Florida, USA.
Service Provider Offshoring
The JV model of outsourcing may involve deep commitment on the part of a client organization, a move that management at traditional companies may sometimes be averse to. To counter the perceived risks of these models and to capitalize on the benefits of offshoring, companies resort to outsourcing projects, programs and individual work orders to offshore vendors. Interestingly, outsourcing to service providers is also the most visible offshore outsourcing model, and it encompasses a wide range of work, from small projects to multi-year contracts amounting to millions of dollars. Here are the most popular forms of outsourcing to offshore vendors, all of which have strongly been experienced and practiced by Astha.
Onsite Subcontracting with Offshoring
This is perhaps the simplest outsourcing model, where a firm places its skilled people "on site" at the client’s location. The people thus placed become a virtual part of the client's team. The model is also called staff augmentation.
Pure Offshore Projects
A pure-offshore project involves instances where the scope is well defined and the work is discrete enough to be done remotely with little supervision. This model of offshoring is less prevalent and generally seen only in a small scale development of software component or modules. The model is also being adopted by innovative organizations looking to capitalize on foreign talent that isn't very mobile.
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