Offshoring Delivers a Competitive Advantage to Software Companies. Sand Hill Groups First-of-Its-Kind Study Reveals Offshoring Trends, Best Practices and Risks.

The report, The Roadmap to Offshore Success," is based on in-depth interviews with 15 senior executives and survey responses from offshore decision makers at 51 software companies. The participants provided in-depth information regarding their companys offshoring needs and strategies.

SAN FRANCISCO, CA (PRWEB) July, 2003 – Offshoring is becoming a mainstream way of doing business in the enterprise software industry. So says a new Sand Hill Group research report released today which analyzes the opportunities and challenges of offshoring for software companies.

Offshoring is rapidly changing the fundamental economics of the software industry," said M. R. Rangaswami, co-founder of the Sand Hill Group, presenting the findings at the firms Enterprise Offshoring conference in Santa Cruz, Calif. It is important for software companies not to underestimate the speed with which offshoring will transforming the competitive landscape."

The report, The Roadmap to Offshore Success," is based on in-depth interviews with 15 senior executives and survey responses from offshore decision makers at 51 software companies. The participants provided in-depth information regarding their companys offshoring needs and strategies.

Nearly nine-in-ten software companies surveyed are offshoring today or plan to do so in the next year, according to the study. Software executives detailed significant benefits from their initiatives: budget savings of 40 percent or more, quicker time-to-market, and product quality comparable to or greater than that produced domestically.

The study exposes the myth that offshoring is limited to non-core development and support services. Fully 79 percent of offshoring companies are sending core product development tasks overseas. Another 42 percent send professional services-related work.

We started by sending core work offshore for our biggest products," said one senior technical executive who participated in the project. We did not consider the possibility of not being successful."

The study also outlines best practices for successful offshoring initiatives. In order to deliver a consistent, bottom-line benefit, offshoring needs to become a strategic element of a software companys operating model. It demands close attention of senior executives and needs to evolve from a project-by-project mentality to a strategic partnership. This can only happen with a thorough assessment of all possible opportunities and models.

The offshoring report is a must-read for top executives in the enterprise software industry," Parmeet Chaddha, senior VP Corio Technologies. It contains both strategic and tactical advice for first-time offshorers, as well as veterans."

Other highlights from the study include:
IP is a red herring. Contrary to popular belief, most software executives are not significantly concerned about intellectual property theft when they offshore work. Troubles hiring in offshoring hotbeds, such as India, and worries about the impact on U.S. technical staff morale are more frequently cited as offshoring challenges.

Failure is possible. As with domestic projects, some offshore projects fail. By adopting rigorous process control and adhering to best practices, companies can significantly reduce the risk associated with overseas projects.

People are still the key to success. An offshore team with strong domain expertise and strong credibility spells success. It is critical to know the core team members who will be involved in various aspects of an overseas project. It is equally important to have an open and clear communication channel with the offshore team to overcome any cultural differences.

Vendors must prove their value. To effectively compete in a crowded and growing marketplace, vendors will need to rise above pricing battles and win deals based on specialized skill sets, better processes and strong client references.

The value of this report is in the practical insights and best practices outlined by talking to experts in the software community," said Rangaswami. The report will serve as a guide for software executives as they embark on new offshoring initiatives and it will be a stimulus for new strategic thinking among veteran offshorers."

To find out more information or to purchase The Roadmap to Offshore Success," visit www.sandhill.com.

Sand Hill Group
Sand Hill Group serves the $600 billion plus enterprise software, services and solutions market. Sand Hill Group provides investments and management advice to emerging enterprise technology leaders. Sand Hill also publishes an electronic newsletter, Enterprise Critical, produces the Enterprise series of conferences for CEOs and other high level executives in the industry, and creates high-impact research reports for its constituents.

Find out more information at www.sandhill.com.

Press Contact:
M.R. Rangaswami
Sand Hill Group
mr@sandhill.com
415.922.9802