With current technologies, security and access to information and documents can be easily controlled and organisations can have all the security they need. Now organisations can manage any down side and risk. As Australian companies see the benefits and manage the risks, we can only expect this trend to continue.

So what is really happening in the BPO industry? Yes, labour is being sourced from low-cost skilled labour pools, such as in India and Philippines, but this is purely the commercial aspect and what makes financial sense in the current market conditions. Ultimately however, it creates a dynamic global workforce, with the market forces distributing and balancing wealth and prices across international borders and according to business value.

We can expect to see BPO driven by cost reduction but also by other factors such as specialist expertise. Done in the right way, BPO makes organisations more efficient, skilled and competitive as well as reducing costs. The latest offshoot in the legal industry, LPO is just a sign of more to come in the BPO industry.

From left, TJ (graphic designer), Sunil (MD), Haymish, Ketan (developer), Karan (developer), Vineet (SEO), Sandy (developer)

Last week operations manager Mr. Haymish  Kharag from one of our client in UK visited our office in India to meet their development team. He was on his holidays to India and he decided to meet their team before he goes to his first holiday destination. It was long journey thats why he looks tired in the pictures. He was hardly able to keep his eyes opened

He liked our setup and delighted to meet the team that is working for his company. They have a team of 5 IT professionals including one graphic designer, one seo exec. and 3 developers.

Employees in it for the long term generate long term value as they build stronger relationships with their employer and a much better understanding of the business. The problem is with India’s IT wages rapidly increasing, employees expect big pay hikes which ultimately eats into the employer’s profits. Is it better to let employees leave for higher pay elsewhere and recruit another low cost Indian IT professional as a replacement or retain for the long haul?

There are arguments for both sides, costs need to be controlled yet businesses must look to hire for the long term. I think there is more than salary that pushes employees to switch jobs because by nature most people resist change and moving to new jobs. So why are so many people leaving their jobs?

During my time in the IT sector, I have worked with both developers from India and the UK. There are some fundamental differences in the employment system, employee attitudes and employer attitudes. Although India is growing in IT talent, it still lacks fundamental employee rights meaning employees are more likely to suffer and complain in private rather than to their employers. With employers in India having the ultimate right to dismiss employees as they wish, it’s little wonder why employee problems remain hidden and the only way out is to find another job.

This presents a good opportunity for those who can create the right working environment and culture for their employees. With India’s abundance of lower cost IT talent, it’s easy to take the factory farm route to drive productivity and reduce costs but only at the expense of long term value and loyalty.

It’s far better to focus on long term value and loyalty to gain the long term benefits. It’s just the core things we as employers should provide to get the best from India’s IT talent

• Treat your workers as humans, not chickens. Give them space to work and provide the right infrastructure and facilities so they can work to their best. Employees also want to work to the best of their ability to grow so why not facilitate this and reap the long term rewards together even if it costs you slightly more initially.
• Give some respect. Good work deserves praise and praise costs nothing. By far the most cost effective productivity booster. As they say, the best things in life are free.
• Pay a decent salary. I’m not saying go over the top and give massive pay hikes each year. If you’re getting the other things right, employees won’t need such a huge pay hike to compensate for deficiencies in other areas.
• Make sure your management is acting fairly and in a just manner. It’s easy for managers to let their power go to their head. Make sure employees can complain right to the top without having to go through supervisors and management.
• Be nice and make your brand and company a place to stay. Employees talk and good words about your company can get out quickly. Surprise perks can get employees talking. However, it can easily go the opposite way. Respect your employees and they will respect your company and brand. Together companies and their employees can create long lasting value and loyalty together for the benefit of their customers.

At Virtual IT Studio, we like the organic route, it may not be as cheap and cheerful as the factory farm, but it’s a lot more humane and lot more beneficial to both employees and clients in the long term. We always strive to find ways to drive value and benefits for both our employees and our customers. Together we can be a success!

Atlanta based security vendor, SecureWorks recently conducted a study showing India being the safest digital country with only 52 cyber attacks per 1000 PCs compared with 1600 cyber attacks per 1000 PCs in USA.

This is great news for India, however there has to be an ongoing improvement process for India and also for the rest of the world but certainly a good start. We certainly can’t be using these statistics to become complacent in our efforts.

There are many factors that could cause the differences between countries such as the ratio of windows, Mac and Linux PCs, each with varying levels of security. Other factors can be the level of antivirus/firewall usage and the level of protection which ISPs can offer too.

Ultimately security is paramount and every organisation has to take it seriously. At Virtual IT Studio, we take security very seriously using the latest firewalls, antivirus, anti-spyware and a range of backup options to ensure our clients’ data is safe and secure if anything unfortunate were to occur.

After spending over 5 years working with offshore IT freelancers and companies, I’d say the clear answer is no. There are no guarantees and can actually cost you money. However, if done correctly to minimise the risks, there are definitely big savings that can be achieved. Identifying the hidden costs before moving your IT offshore is well worth the time spent and significantly reduces the risk going forward. Some important hidden costs include…

1. Cost of Vendor Partnership
2. Cost of Transition
3. Cost of Layoffs
4. Cultural Cost
5. Cost of Bridging Processes
6. Cost of Managing an Offshore Contract

Cost of Vendor Partnership

Selecting and establishing a relationship although essential and beneficial, still has a cost. You would need to document the requirements, prepare and send RFPs, evaluate RFPs and then completing the agreement.  Larger contracts can cost more in legal fees and take more time to complete with many factors such as project cost, terms of service and deliverables.

Cost of Transition

Outsourcing and offshoring your IT will certainly involve some cost in moving work from your company to your partner company. It can take time for each side of the partnership understand each other and build a productive working relationship.

Cost of Layoffs

Usually offshoring may involve layoffs which incur severance packages and present a tricky situation in which you need to retain commitment from those to be laid off to help with the transition period.  Leave enough time for the transition and keep everyone onside.

Cultural Cost

Living a multi-cultural world, we have to consider the cultural differences and their impact. The work culture in the western world differs in many ways to culture in the east. Establishing a partnership with an offshore company requires linking both cultures to create a productive working relationship. This can take some time creating additional cost.

Cost of Bridging Processes

Your business will have certain processes for developing software or graphics design and your offshore partner will also have their own processes. A successful partnership requires successful bridging of processes between your business and your offshore partner’s business.   Too often, we fail to spend enough time understanding the offshore partner company and how they run their operations. Similarly, offshore providers spend too little time understanding your business which creates additional cost going forward.

Cost of Managing an Offshore Contract

Using an offshore partner will require additional time to manage projects and deliverables in order to ensure both sides are well aligned to the project goals and requirements. Typically, your offshore partner will provide a project manager to liaise between you and your offshore IT team.

Minimise Risk of Hidden Costs

The easiest way to eliminate these hidden costs is to do nothing and retain your onshore IT team. Unfortunately, this will not bring you any cost savings either.  Having faced these problems, I would say the best way to take advantage of the cost savings and minimise the risks is to hire dedicated offshore IT professionals. There are a number of reasons this would make sense.

• For a start, dedicated IT professionals will adapt, grow and mould with your business and culture much faster than IT professionals working for an offshore partner company.
• With a dedicated offshore team, you can retain full control the processes, business culture and working environment. This eliminates things like bridging processes across two businesses or merging two work cultures and environments.
• A lot of legal costs will be reduced as contracts are simply reduced to hiring IT professionals and infrastructure rather than contracts specifying project requirements and deliverables. Again, this way you would retain full control of the projects and the work to be carried out.
• Transition times are much faster as your offshore team would work dedicated and directly with you to quickly understand your business and requirements.

To summarise, the key benefit of offshoring is cost-effective labour rates which reduce IT costs and increase IT productivity. Your competitive advantage includes the team you create (onshore and offshore), the business culture you create, your own processes and project management. By hiring dedicated in-house offshore IT professionals instead of outsourcing to an offshore partner, you retain full control of your competitive advantage and reduce your IT budget. Have your cake and eat it.

If you are curious about offshoring and would simply like some advice, I would be more than happy to help and advise you. Feel free to contact us for advice and don’t worry, there are no hidden costs! It’s free simple advice.

There are a number of options; firstly you can use a freelancer, great for one-off projects without any long term commitments. The second option is to work with an outsourcing partner company which can handle all your projects on your behalf. This has been the typical choice for a long time; however it has had its own problems too. The third option is to set up your own offshore workforce, which gives you much better control and management of your IT unlike the previous options.

There are also significant benefits in keeping your offshore IT team in-house, with employees dedicated to your business. It means you can maintain control of your IT and build an IT workforce that moulds to your business culture and principles. Over time, you can build a strong relationship with your offshore IT team that brings better and better results as the bond grows. With fixed costs, there are certainly additional cost benefits when you maximise output from your offshore IT productivity without driving up the costs. With an offshore team dedicated to your business, employees gain a much better understanding of your business and what it requires.

So start by asking what you want to achieve and consider all the options to make sure your IT offshoring is a success and adds significant value to your business.

In a review country’s treasury department had last year identified the potential of around $10.6 billion in annual savings which will surely effect many Indian companies.

India has many advantages as IT outsource destination for UK and world including experienced IT skills, better command over English language and time zone.

Earlier TCS had won $400 million contract with British government, But under new government they may need to re-negotiate this deal.

Anyway it will be interested to see how it effects Indian IT companies.

Personally I think there will be increased private sector outsourcing to India in following few years.

With Virtual IT Studio you can make your dedicated off-shore team of employees working in India at our fully furnished and managed Studio.