Although offshoring is a great idea and works well for some software companies it is quite challenging to align organization's goals to process implementation and also address change and process management at the same time.

Basically, three important offshore outsourcing challenges need to be overcome in order to successfully deliver quality software products.

Alignment of Goals - Organizations have to identify and prioritize areas that need to be outsourced. Outsourcing should be made only when there is a need to enhance customer satisfaction or to introduce new value added services for its customers. Because, when processes that do not require any value addition are outsourced, they become a cost overhead for the company.

Economics - Outsourcing should be able to provide cost benefits to the company. This is a great disadvantage for startups that cannot baseline their savings initially. Outsourcing requires a stringent controlling framework that controls all offshore outsourcing costs in order to reap the planned benefits.

Change - With outsourcing, organizations need to be ready for change management as well. This is because; expecting a change to product/process development at the earliest time is not possible at all. With remotely located outsourcing teams and a process driven approach, this comes as a major set back for executing ideas faster.

These challenges can be overcome using the ‘inshoring' concept. The top features of this model are:

Quality Management Systems and Processes - The Inshore model invests heavily in implementing process quality and standards for service delivery, such as ITIL and Lean Sigma.

Technology Leverage - Inshoring concept uses new technologies that either accelerate service delivery (e.g. pre-integrated process frameworks, workflow engines), or fundamentally change service requirements (e.g. hosted applications, enterprise 2.0 tools), and are critical to the long term productivity of businesses and key drivers of "time-to-value".

Integrated engagement model - One of the key features is the integration of the in-house and outsourced teams. Inshore services are basically developed as a customer-specific, dedicated Center of Excellence designed to reflect the customers' environment, whether the engagements are project oriented, or long term managed service contracts.

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