Digital Prodigy International

Software has become integral to almost every aspect of our daily lives. The software industry is worth hundreds of billions of dollars and has become one of the largest and most influential in the world. It has followed the trend set by other mature markets (e.g. manufacturing) by offshoring services to the developing world.

Many organisations outsource their software development to other companies who specialise in specific niches of software development. Offshoring is when outsourcing takes place in the developing world. According to global consultancy firm McKinsey, offshoring represented a US $10bn market in 1998, but has a projected volume of US $140bn in 2008.

Offshore development creates a sustainable advantage by accelerating product innovation, lowering costs and reducing project timescales while providing increased resource availability. However, many companies have encountered the inherent risks and commercial pitfalls when attempting to re-engineer and manage a complex operational supply chain.

Time differences, distance, cultural barriers and communication problems can be the causes behind poor capture of requirements, diminishing quality levels, a lack of data security and a dismissive approach to project timelines. The result of these factors can lead to not only a zero saving on offshoring but a huge opportunity cost.