Software
Outsourcing is particular business functions, it is not something
new-fangled. In the late 1970’s and early 1980’s many Software
Development companies and
service bureaus those performed these outsourcing services for many
customers. They were gaining economies of scale from their
investment in what was then.
Similarly,
in the 1980s, large U.S. integrated circuit chip (“chip”) design
companies began moving manufacturing of their chips to offshore
fabrication facilities (or “fabs”) that also leveraged economies
of scale to produce large volumes of chips for many chip companies.
This
eliminated the must for chip companies to raise capital or spend the
time necessary to establish their own manufacturing capabilities. The
benefit for these companies
included reducing their costs to produce their chips, while release
up capital and time to develop newer and better chips.
Today,
almost every new U.S. chip company is “fabless;” they design
their semiconductor products and turn to offshore fabrication
facilities to produce them. This model for outsourcing allowed the
U.S. chip design industry to remain vibrant and it continues to
attract investment capital.
As
the global economy continues to cultivate and expand, additional
companies are evaluating other parts of the world with lower cost
business and technology talents where they can parse at least certain
parts of non-manufacturing operations currently performed in the U.S.
Many
experts emphasize that the current “jobless” economic recovery in
the U.S. reflects that companies are meeting increased demand for
their goods and services by looking offshore for more cost effective
“suppliers.”
Over
the last 15 years, outsourcing has captured the awareness of many in
the Software
Development Production faculties. Initially, for the most part of
software-associated outsourcing occurred nationally, with companies
outsourcing convinced development projects to domestic entities -
often specialized “body shops.”
For
take instance, there would a company which needing Java development
support, looking to find a restricted company with the exact
professional team of software outsourcing and software engineers to
acquire the job done with no trouble and rapidly, instead of having
to staff up its own development organization with Java experts that
would only be needed for a limited time period.
Hence,
these outsourcing activities were primarily undertaken to help a
company reduce its cost structure and/or move noncore development
activity outside the organization, so the company could focus on its
core architecture development.
More
recently, software
outsourcing company is undertaking a transformation already seen
in other industries, namely, core development outside the U.S., i.e.,
offshore, by contracting with third parties, i.e., outsourced.
Primary
reasons for offshore outsourcing in software development include
potentially less costly development resources in other parts of the
world, e.g., India, Eastern Europe or Russia for more complex
software development, and specialized talent not widely available
elsewhere, e.g., China for Asian language software development or
Mexico for Spanish language software development. As more and more
companies seek out to do some offshore software
development services would to provide as global.
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