Implicit Influencing Factors For Outsourcing Deal Costs

1
Implicit Influencing Factors For Outsourcing
Deal Costs
2
Introduction

• When a company needs to focus on its core
  business, it opts for the outsourcing of the
  non-core functions to third-party software
  development services providers. But even if you
  outsource, the cost may not be less since a
  domestic software provider will incur the same
  expenses and charge you likewise. So, the best
  option is offshore outsourcing.Some Factors
  That Influence The Cost Of Outsourcing

3
1. The Geographic Location Of Your Outsourcing
Partner

• Latin America is in the same time zone as the
  USA, follows the USAs rules, and has cheap rates
  and hence they are preferred. Although Southeast
  Asia, particularly India, offers the cheapest
  rates, the time difference and cultural
  differences make communication harder.

4
2. Pricing Strategy

• The model varies with your business goals. Hence
  the pricing of the models also varies, so having
  proper communication with custom software
  development companies in order to know their
  pricing models and to negotiate details is
  necessary.

5
3. Project Outsourcing

• When you are outsourcing software development
  projects, the provider agrees to a fixed price
  and any changes that you make are charged extra.
  They also have hourly pricing models where you
  can change your requirements or shift your goal.
  But in this case, you will definitely overrun
  your budget.

6
4. A Dedicated Team

• If you have a bigger project, the service
  provider supplies a dedicated team working under
  one roof. This is charged on a monthly basis
  which is considerably cheaper.

7
5. Hidden Costs

• Searching and selecting a software development
  service provider also has its own expenses.
  Reviewing the proposals, negotiating the
  contract, and assessing the proposals all add to
  your costs. The taxes that are involved also add
  to the costs of outsourcing. Unexpected
  expenditures like travel needs, annual leave in
  the service provider's country, the number of
  public holidays, etc. add to nearly 20 extra
  costs.

8
Endnote

• Hiring expert developers will dramatically
  reduce your manufacturing costs and allow you to
  focus on core functioning. But you should also
  focus on proper negotiation, selection of service
  providers, and proper bargaining. These will help
  you to get a quality product at a much lower cost.

9
Conclusion

• All the above points are necessary to check by
  the companies that provide software development
  services. Choosing experienced and qualified
  professionals is important and researching
  thoroughly before hiring any custom software
  developer.

10
(No Transcript)
11
(No Transcript)