Frequently Asked Questions About Offshore Outsourcing

How much money will I save by offshore outsourcing?

Naturally, each engagement is unique, but savings typically range from 20% to 50%. Savings are often lower the first year and increase in subsequent years.

Besides costs, what benefits would I gain from offshore outsourcing?

Businesses of all kinds have gained competitive advantages from outsourcing. These are some of the benefits cited by businesses who outsource:

• Greater speed to market with products and services

• More flexibility in executing different types of work

• Access to a large pool of high quality resources

• Same or improved quality

• Ability to refocus in-house staff on more strategic projects

What are the hidden costs of offshore outsourcing?

Although the overall costs will be lower, offshore work incurs costs in several areas not seen in onsite work, such as travel, international phone calls and developer licenses. AC Corporation’ engagement model effectively minimizes these costs.

Is offshore work appropriate for small and mid-size businesses?

The “critical mass” criteria for going offshore has come down dramatically as offshore management processes and procedures have matured. Projects as small as $50,000 can benefit from the cost savings of offshore development. Because the largest Philippine firms with 10,000+ employees focus on “mega-deals” with large business clients, they would not be the best choice for executing small projects. AC Corporation’ mid-size facility is ideally situated to assist small and mid-size businesses looking to offshore.

What risks are involved in offshore delivery?

As a maturing industry, many of the risks associated with offshore have lessened. Below are some frequent areas of concern and how they are addressed by AC Corporation:

• Communication: A detailed communications plan and procedures are a standard part of our delivery methodology. Collaboration tools and “soft skills” training of our offshore employees further ensure a high level of continuous communication.

• Turnover: Our offshore facility has lower than average attrition rates.

• Environment Equivalence: We’ll make sure your development environment adequately represents your production environment.

• Data Security and Business Continuity: Our Philippine facilities have a strong focus on protecting our clients’ data and intellectual property. Some of the provisions are:

  • Best practices disaster recovery and business continuity processes and procedures, including usage guidelines, backup policies and procedures, emergency procedures and regular system audits

  • Multi-level security including firewalls, virus protection, and controlled access privileges

  • Configuration management tools

  • Non-disclosure agreements

  • Restricted physical access to project area and prohibition of removable media

  • Segregated servers and network domain controllers with role-based access

  • Exclusive mail server for client communication

  • Secure VPN, FTP and/or leased lines for secure communications

How do I know you can deliver what you promise? (I’ve heard there are many fly-by-night offshore firms.)

AC Corporation has been in business over 25 years, meeting our clients’ expectations of quality service and innovative IT solutions. Our ISO 9001:2000 Certified offshore facilities and our project managers follow a proven project management methodology, incorporating industry best practices and metric gathering mechanisms to ensure your project is executed smoothly. Your project coordinator has years of successful offshore delivery experience.

How do you ensure requirements get communicated?

Requirements are gathered locally by AC Corporation’ onsite personnel, and detailed documentation captures the requirements. Additional factors ensuring coordination and communication include project management processes, delivery director oversight, regular status reviews and secure connectivity/collaboration tools including leased line and a project intranet.

How do you ensure the code will be of high quality?

In addition to extensive testing and code reviews, we have a Senior Technology Council that audits code and monitors the quality of code written by each developer. Defect Density (bugs/line of code) is closely tracked across all projects and is well below industry standards.

Aren’t IT wages in Philippines going up?

While demand for IT workers in Philippines is high, the supply of IT skills is greater than anywhere else in the world. Philippines graduates 10 times the number of Computer Engineering graduates than the US does. Even with the current rate of increases, U.S. firms will still save significantly by off shoring appropriate IT work to Philippines.

Why not China? I hear it’s even cheaper than Philippines.

Eighty percent of U.S. IT offshore is going to Philippines. The offshore IT outsourcing industry in Philippines is tested and mature. While rates in China are lower, the market will not reach the maturity level of Philippines’s for at least 10 years. English language skills remain a significant barrier.

Additional advantages to off shoring in Philippines include a large base of world-class software professionals educated in a rigorous academic system; national and state government agendas that strongly support the IT industry; and, infrastructure policy and investment initiatives to promote the development of IT.