WHITE PAPER: Offshore Software Development
Aspire Systems, Inc.
www.aspiresys.com Page 3 of 17
1. INTRODUCTION
Carrying out software development in a distant land, halfway across the globe and entrusting
unknown people with valuable projects sounded absurd a decade ago. But a few firms went ahead
and tried out the concept and voila... they struck gold! Who would have thought that developing
nations like India, China and the Philippines would turn out to be a gold mine for some of the
world's largest economies? What started out as an experiment has now become a first-rate practice
in software development. Indeed, today, offshoring has become mainstream.
Offshore software development provides you access to world-class solutions from areas of the world
where operating costs are much lower than in the west. Time zone differences are a big help too.
For example, the average difference of 10 hours between the U.S. and India is perfect for
accelerated and "round-the-clock" problem solving. A client reporting a bug from the U.S. at the
end of the day could have it fixed from India by the next morning.
But in case you're wondering, "Is it as simple as that?", the answer is "No, it's not as simple as
that." There are several issues involved in making the offshore option a successful one. The
objective of this paper is to present some serious concerns of US companies regarding offshore
outsourcing and how these concerns can be effectively resolved. This paper highlights India as an
enticing offshore development center for you - the reasons to choose it and the steps involved to
efficiently utilize this opportunity.
2. EVOLUTION OF THE CONCEPT
In the early and mid 90's, outsourcing software development to offshore suppliers was seen as a
cost-cutting approach used by a few large U.S. companies to offload mainframe maintenance, Y2K
readiness and other assorted IT grunt work. Today, fast-growing Internet startups, midsize
businesses and dozens of major companies are using offshore suppliers not just for maintenance
and reengineering, but also to develop sophisticated new applications, complex engineering
applications and new products. Many companies have identified India as a major centre for R&D
related activities because of the availability of highly skilled technical resources.
At first, the thrust for going offshore was due to the shortage of skilled IT talent in some of the
world's largest economies. According to a study by the Information Technology Association of
America (ITAA), inspite of a national IT workforce of 10.4 million in the US, almost half a million
positions were to go unfilled in 1998, despite hiring 900,000 IT workers that year. This number of
unfilled IT positions, due to a lack of applicants with the requisite technical and non-technical skills,
was expected to rise to about 1.1 million by 2003.
