Stan Ventures being in the management consulting business had been receiving a lot of queries in 2015 asking about the best-suited growth strategy for technology companies, is it the traditional OUTsourcing or the revolutionizing new strategy that gets their job done by the end of the day. We would like to take up this opportunity to explain to you how factors differ in each of the practices and what exactly would be your best bet for 2016.
To kick-start things with a clear picture, the Stan Ventures team conducted an online poll to find out various companies’ opinions on OUTsourcing and INsourcing practices. Here are the poll results we were able to pull out for some frequently asked situation based questions,
What was the first approach – OUTSOURCING or INSOURCING?
Nearly 70% of the company who walked in for the poll had their first had to experience with Outsourcing. Outsourcing was considered to be the winning bet for companies in the initial stages of the market evolution.
Experiences with OUTSOURCING
3 out of 5 companies who opted for Outsourcing returned back with a bitter experience. The quality of work delivered did not meet the promises made during project sign off. There was least number of companies who had a very satisfying experience but they had to shed dollars equal to the native development costs.
Will you OUTsource again or recommend OUTsourcing to your colleagues?
Around 65% of the total poller had no intention of recommending the outsourcing services to any peers as this action gave no satisfaction to spread the word on.
Preferred way of INsouricng?
This poll result clearly gives out the neck to neck situation between the most sought out ways of Insourcing, The native expansion practices, and the Subsidiary placement technique. Both gives the company an added advantage but the subsidiary placement in developing countries sealed the deal with an extra edge advantage than the native expansion.
Preferred Geographic Location
So the poll was carried out to understand the most sought out destination for a company’s subsidiary which gave out a shocking result with India as the preferred country followed by Russia, Ukraine, and Belarus.
Would you recommend INsourcing?
Insourcing brought its competition to the knees when it came to recommendations.
The poll results might have triggered a lot of questions that seek realistic answers than conceptual ones. We have taken up enough time to brainstorm and understand the basic yet deadly questions that every single company would like to hear an answer for. Here it goes,
Why are Majority Polls against OUTsourcing practices?
Many companies we consulted faced a bad situation where they ended up paying hefty dollars in thousands for a lower quality work and a few even felt that the prices were sky high for a company in developing country added they still delivered the quality job as promised.
Majority quoted that they were pulled into a storm of fake promises eventually outsourcing the project because of the low-cost structure. Nearly 3 out of 5 companies we consulted pointed out the loss of control over their projects outsourced. They literally had no real picture of the number of people working on their project than quoted by the company they outsourced to. The idea of security was a mere big zero, as data confidentiality was at stake (Though effective NDA’s were signed). The extension of support once after getting the project delivered was less, this scenario led to the parent company lose their top class customer support with the clients as they only had a rough Idea on the work performed with the project.
Is OUTsourcing bad?
Definitely not! But outsourcing involves a lot of hidden risks and situations, which gets exposed only during the final stages of your project delivery. During such situations, one is subjected to a state of high pressure and questioning for proceeding with such an action plan. Internet researchers show that 3 out of every 5 companies who outsourced, ended up having bitter experience.
As the above statistics speak, OUTsourcing depends on the company you work with and you can’t risk yourself every single time hoping that this chance might turn trustworthy. It’s just a handful of companies around the globe, providing WOW service, but sourcing them is finding a needle in a haystack and of course, they are costly in the end.
How INsourcing is different from OUTsourcing?
INsourcing deals everything in-house, it’s a step by step process where we generally strengthen the current team to make you a self-sustained technology genius organization. So the question of how we are going to do it? By recruiting top talents for the company, thereby leading to high control of actions within the organization that includes both operations and project management.
As a matter of fact, with INsourcing, your every single problem faced in OUTsourcing is washed away as every action is carried out within the controlled environment of your organization.
How INsourcing is carried out?
INsouricng is generally carried out by encouraging native team expansion by bringing in top talents for every needed department.
With the course of time, INsourcing had got a facelift which is accepted, supported and recommended by many technology companies, it is the INsourcing via subsidiary placement in developing countries. Among the developing countries in the world market India, China, Belarus, Lithuania, and Vietnam holds top positions as the hottest destinations for an INsourcing market. India sure knows how to beat down its competitors in style. The huge list of pros among its competition along with Stan Ventures support makes India an invincible choice to pick.
Why India among other countries?
A recent study in 2015 had been carried out to understand the market of the top trending INsourcing destinations.
- Russia/Ukraine/Belarus tends to be more expensive, due to higher education and skill levels.
- Vietnam tends to be inexpensive due to very favorable currency exchange, language barriers and a fairly new IT market with a lack of senior developers.
- South America tends to be expensive, due to similarities in time zone, language, and culture.
- India tends to be more cost-effective for the higher education and skill level it holds. Very favorable currency exchange with huge English speaking and quick adapting engineer community makes it a deal you cannot refuse.
India, the leader amidst the top developing countries, holds a huge population count among which a major segment fall under well talented, creative, young English speaking engineers community. With a major difference in the currency value of every developed country, India promises to be the favourite destination for safe and smooth operation. India boasts holding high talented young and vibrant workforce, which promises high, efficient productivity at the workplace.
Culture is a crucial factor that every company would like to cling on. India is a diverse country with 22 regional languages and lifestyle, People of India are adaptable to cultural differences and they always work towards making it their own. The arrival of tech giants like IBM, Microsoft etc. have given our people a taste of the western culture and its lifestyle, Our people took time to understand, adapt and have perfected in following it.
What is the exact situation in India?
Stan Ventures is happy to bring you the market situation that prevails in India. Due to high currency value differences between a United States Dollar (USD) and an Indian Rupee (INR) the cost of resources is way more affordable than you can imagine. The real-time scenario is that you can recruit a Senior Java Developer with his core expertise in Java Frameworks and OOPS concepts at $800 USD a month, resources with similar technical skills are recruited at $3000 USD – $5000 USD a month back in the United States, that’s a minimum 300% savings on a single resource when insourced in India. Adding on to the fact, you can practically run a 5 person office with a salary of a single US resource.
For an organization of any size, the ultimate goal for a successful year lies entirely in reaching a competitive position in this ever-growing technology market with a unique footprint to inspire. Such action plan can be made into a reality only when the company is willing to look ahead than what they have settled for at the moment. INsourcing is a one-word mantra that can strike out the business competition and INsourcing via Subsidiary in India is an invincible move to make the vision of every company an easy journey by flying over the obstacles.
Now, who doesn’t want to save thousands of dollars every single day!
Why should I work with Stan Ventures?
Team Stan Ventures is a group of like-minded business professionals who share a common vision of helping the other company’s dreams to become reality. Stan Ventures has been in the management consulting business for some time now. Their time had been spent entirely over the INsourcing business idea, understanding every challenge the strategy holds. The team has put its time formulating the best and stress-free route for the foreign companies to operate in India. Stan Ventures holds responsibility for the subsidiary registration, finding office space, recruiting resources and operating the office on behalf of the parent company. This marks a one-stop shop for all your subsidiary needs to operate in India.