Offshore Staff Management

Effective Offshore Staff Management Essential for Successful Outsourcing

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"IT Outsourcing requires the free-flow of information between the home office and offshore staff is critical to avoid cost overruns and project delays," says Frost & Sullivan IT Industry Analyst Jarad Carleton.

Even with constant contact between the home office and offshore staff, multiple time zones and cross-cultural miscommunication has a tendency to complicate successful completion of outsourcing projects, especially while working on projects with tight deadlines.

Establishing timelines and performance metrics used to measure the progress of offshore employees and outsourcers are essential for companies to adequately monitor progress and ensure on-schedule project completion. Additionally, succinct service-level agreements are critical tools that should be used to ensure adherence to projected cost savings.

Just as performance metrics and service-level agreements are critical to meeting projected cost savings, so is the task of choosing an appropriate offshore outsourcing company. Companies can match their needs to the services offered through a complete analysis of cost differentials, standards, service levels, certifications, and risk mitigation.

Additional factors should also be considered when sending IT jobs to low cost regions as it may be possible to benefit from the tax incentives offered by many offshore outsourcing countries. For example, India provides 100 percent tax deduction on all foreign export profits and a five-year tax holiday for offices that are set up to service the hardware and software industries.

"Our study shows that India isn't the only country to offer attractive incentives and that a company should shop around the globe looking not only for low cost educated labor, but also for government incentive programs," says Carleton. China has created an incentive program called "Five Exception and Five Reduction" will allow companies to get tax breaks as well as free first year rent. Mexico offers six-month grants for IT jobs created in the southern part of the country. Poland also offers grants for job training. Romania offers software developers an income tax holiday and Malaysia's 2020 program incentives range from partial exemption of income tax to government grants for building facilities.

Tax incentives and low labor costs shouldn't be the only decision-making factors however. There are compelling business reasons for utilizing Mexican or Brazilian IT labor pools that are frequently overlooked by companies in high cost countries. Furthermore, Romania and Poland are examples of educated low cost nations that are better able to meet the business needs of Western Europe than countries such as Malaysia, China, and India.

Frost & Sullivan, a global growth consulting company, has been partnering with clients to support the development of innovative strategies for more than 40 years. Its advisory expertise integrates growth consulting, growth partnership services and corporate management training to identify and develop opportunities for clients. While serving clientele ranging from virtually every Global 1000 to emerging companies, Frost & Sullivan's comprehensive industry coverage includes a global perspective of all vertical and horizontal industries. Its unique coverage combines ongoing analysis of markets, technologies, econometrics, and demographics. For more information, visit http://www.frost.com.

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Global Offshore Outsourcing and Offshoring of IT Jobs
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Reference: http://findarticles.com/p/articles/mi_m0EIN/is_2004_Dec_6/ai_n7636415