Software
development programs were kick started long before. But the concept
of offshore software development was conceived only in early 1990’s.
Not many companies where doing offshore software development programs
at that time. Companies at that time where having their own space at
their own locations. There they will hire software professionals and
take all kinds of development projects. Then, who is the first one
who came up with the offshore development idea? We have to dig into
the history to know about the roots of Outsource
Software Development projects.
Anyone
remember the name Andersen consulting? In Europe and US they were the
first to attempt project development outsourcing. At that time no one
ever thought about doing such type of initiatives. Everyone liked to
look after their business from the same place itself. But the term
outsourcing was not anyone at that time. Anderson and allies were
doing onshore development projects. Their method of project execution
is similar to the one that was doing by offshore
development companies. The company was recruiting many software
professionals at that time. The hired professionals were sent to
special training sessions. In that session they will be taught about
the various ways in which a project has to be executed for the
customers. Training on software development was given on diverse
platforms. Again, there were many levels in it. They were
programmers, system analysts and project managers. After giving a
common training program, each level of executives will be again
trained according to their post. By following this method of
development practises Anderson was able to gain lot of business in
the software development area.
At a
time there were able to handle lot of clients. This helped them in
improving the business. But the main problem with this type of
project execution method was its cost. They were hiring programmers
and development professionals at very high prices. Or at that time
the software development
professionals in U.S and Europe were only a few. So there was great
demand for such people. Thus it becomes not practical for smaller or
low investment companies to meet the cost of software development
programs. This forced many to think about alternative methods. It
becomes very much impossible for companies to meet the expenses
related to developing software. Later, it was towards the end of
1990’s many having started thinking about offshore development or
project outsourcing.
In
late 1990’s many companies have started having tie-up with
companies of other countries. Certain other companies have started
enquiring about software development projects and its cost directly
with companies outside the country. All these efforts where started
after realizing the benefits of software development outsourcing.
When compare with the cost associated with developing software in the
hometown with other countries, it was relatively very high. But the
expertise of professionals on developing software was same. This
forced companies to opt for outsourcing. Many companies in U.S and
Europe have started sending project offers to other countries where
production cost was lower. This includes countries like India.
Earlier U.S companies where sending representatives to other
countries for collecting information regarding the cost, professional
expertise, man power, company set up etc. After sometime there came a
change in this trend. The companies in other countries started
bidding for projects and this can be called Outsource
Software Development trend. The company that won the bid will
take the project and submit it on time after completion. Nowadays all
the major outsourcing companies are following this pattern. With the
development of technology it becomes easy for offshore development
companies to find projects and bid for it. The term “outsourcing”
is now used in a broader sense. Not only software development, many
more works have started coming from various companies to offshore
development companies.
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