Balanced Sourcing in Software Offshoring

Solving a problem within the mindset that created it can be difficult. However, in outsourcing, assuming that others will solve what you can’t can be a difficult proposition. Look for competency compatibility in your partner so that you can focus on your strengths while allowing your partner to do what they do best.

Traditional strategies of offshoring and outsourcing were dominated mainly by financial leverage which meant they were focused on high volume and low cost.

Yet another common element in the traditional outsourcing thought leadership was to outsource those processes that posed execution challenges. While there is nothing inherently wrong or right about a certain strategy, timing does impact its  effectiveness.

Before one can make a call as to which strategy to adopt, it is crucial to identify its alignment with broader business goals. Getting the team set up based on your requirements and needs can be a time-intensive process and hence it has to have a direct link with your business strategy.

Control

Determining how much control your company is willing to transfer and how much it wants to retain

Competency

Focusing on core competency and partnering for ancillary competencies

Risk

Determining the risk appetite of your company in terms of not just investing money but also investing management attention and the governance mechanism

Outsourcing problems

Finally, the most important balance is having clarity on whether problems are being outsourced or opportunities are being insourced. Taking an analogy from the manufacturing industry, let’s try to put this perspective as an offshoring decoupling point.

 Don’t outsource your problems

Solving a problem within the mindset that created it can be difficult. In outsourcing, assuming that others will solve what you can’t can be a difficult proposition. Look for competency compatibility in your partner so that you can focus on your strengths while allowing your partner to do what they do best.