Offshore Outsourcing Resource Center

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Q. What criteria do you use to select companies for inclusion into the OSD Supplier Directory and Database?

A. Incoda follows a two-step process for evaluating software development companies for inclusion in the OSD Supplier Directory.

Country Level Criteria

The first evaluation step is done at a country level. One of the primary reasons that customers use offshore software development is cost—more precisely, to capture the cost savings based on the the difference in wage rates for software developers between their domestic (local) rates and those of the offshore location.

Because there are no data on the actual wage rates for programmers at various skill levels for all countries around the world, we chose per capita GDP as a surrogate measure to identify attractive offshore locations. We set a maximum value of roughly $20,000 (USD) per capita GDP at a country level and included countries whose per capita GDP fell below this number. Please see the list of the top offshoring countries included in the OSD Supplier Directory. The threshold value excludes about 30 of the world's highest relative wage rate countries.

Company Level Criteria

The second evaluation step is done on a company level. If the company’s headquarters are located in an offshore location, then it is added to the OSD Supplier Directory if it satisfies the following three criteria:

The company has a working website.
Some or all of the website is in the English language.
The company offers “custom application development”, “custom software development”, “web design and development”, or similar services to external customers and potential customers. Companies that sell only software products are excluded from the Directory.

The Directory also includes companies that are headquartered in a high relative wage rate country if the company operates one or more software development centers in an offshore location and it satisfies the three criteria listed above.

Q. What countries were eliminated based on high per capita GDP?

A. Aruba, Australia, Austria, Belgium, Bermuda, Cayman Islands, Denmark, Falkland Islands, Finland, France, Germany, Hong Kong, Iceland, Italy, Japan, Liechtenstein, Luxembourg, Monaco, Netherlands, New Zealand, Norway, Qatar, San Marino, Singapore, Spain, Sweden, Switzerland, United Arab Emirates, United Kingdom, and United States. This was based on the most recent data from the U.S. Dept. of State, the CIA World Fact Book, and other sources in the public domain.

Software development companies from Ireland and Canada are included in the OSD Supplier Directory, even though their GDP figures place them into the top tier, because these two countries have an established track record of providing "near shore" software development services to Europe and the United States, respectively.

Q. How is the data on individual software development companies collected?

A. Incoda’s process of data collection, validation, and verification is the best in the business. Incoda starts by identifying offshore software development companies through a variety of sources, including Internet search engines, third-party lists and directories, referrals, and IT trade and industry associations. Incoda analysts create an initial listing in the OSD Supplier Directory based on information submitted by the software company and from information available on the company's website.

Information contained in Incoda's Company Profiles, available in the Find the Optimal Supplier Section, is collected using our proprietary online questionnaires, which capture several hundred data elements per company. Once this data is submitted by the company, Incoda analysts then begin the process of verification. A combination of interviews and discussions with company management; extensive cross-checks using other research reports, additional published market research, reference materials, and independent sources; discussions with customers; and on-site visits are used to validate the data.

Please note that given the large number of companies and worldwide scope, we have not conducted site visits at a majority of companies.

Q. How does Incoda guarantee the quality of the supplier data presented in the OSD Resource Center?

A. Each participating software company’s CEO or President signs the questionnaire to certify its accuracy and completeness.

Q. How does the OSD Resource Center support itself?

The website is made available by Incoda as a public service and it represents much of the Company's collective wisdom on offshore software development. Finding the best software development suppliers from around the world is an important element of Incoda’s business model, since Incoda uses these same companies to develop and test the software it delivers to its customers. Additionally, creating and refining the software development methodologies, developing leading project management and quality assurance approaches, and identifying the best practices for offshore software development is critically important for delivering complex custom development projects with the highest quality code and documentation possible, on-time and within budget.

A. Incoda operates the website on a not-for-profit basis and most of the information presented on the website is available to users at no charge. We also decided NOT to accept paid advertisements by software development companies of any sort—no banner ads, no pop-ups, no paid links, no name collection and database rentals, etc.

The website's operating and maintenance costs are covered, in part, by charging a fee for the purchase of detailed Company Profile Reports, which are available in the Find the Optimal Supplier Section. The remaining operating costs required to support the website are assumed by Incoda Corporation as a service to the software development industry.

Q. Are the Company Profile Reports a good value?

A. The Company Profile Reports are an exceptional value! The search functionality offered in the Find the Optimal Supplier Section and the detailed data presented in the Company Profile Reports offer OSD Resource Center users an unmatched capability to quickly identify the best offshore software development companies from around the globe for their specific requirements. Quite simply, the OSD Resource Center allows users to perform initial supplier screening and optimal supplier identification and achieve significantly higher quality results (since it searches the entire database of over 700 hundred companies) for just a fraction of the cost of an independent assessment and in less than 30 minutes.

In comparison, the cost of independently conducting the research to identify potential offshore suppliers, reviewing dozens of company websites, sending RFI’s to an initial list of companies, analyzing the RFI replies, contacting reference customers, cross-checking the information with other independent sources, synthesizing the results, and selecting a smaller list of qualified suppliers is quite costly, both in terms of manpower and project duration. A typical supplier identification project involving 1 to 2 FTEs for 6 to 8 weeks would cost $10,000 to $30,000, or more (fully loaded, personnel cost only; excludes travel).

Q. Why should I consider offshore software development?

A. When done effectively, offshore software development can reduce the total cost of software ownership and improve the ROI of your software development projects. Companies have used offshore custom development to support their overall business strategy, IT strategy, and financial strategy. Offshoring can provide numerous hard and soft benefits, including reduced software development costs, faster project cycle times, higher quality code and technical documentation, and greater end-user satisfaction. Outsourcing custom software development can also reduce ongoing maintenance and support costs, mitigate overall software development risk, and free up senior management time so that they can focus on other business issues. Software development offshore outsourcing has been incorporated by more than two hundred companies in the Fortune 500 and hundreds more small and medium-sized firms.

Q. Who is Incoda Corporation?

A. Incoda Corporation is a custom software development and IT consulting firm, based in Princeton, New Jersey. Incoda architects, builds, and deploys mission-critical software applications that enable core business processes and create competitive advantage. Incoda’s professional services include custom application development, strategic IT consulting, outsourcing advisory services, and quality assurance and testing services. Find out more by visiting About Incoda Corporation.

Q. What are Incoda’s offshore advisory services?

A. Incoda Corporation is the global leader in offshore software development advisory services. The Company helps its clients with offshore sourcing strategy, supplier identification and due diligence, and supplier selection and contract negotiation. Incoda leverages its extensive experience in all aspects of software design, development, and deployment, and its intimate and detailed knowledge of the offshore software supplier marketplace to create the optimal partnering arrangements for their clients. Find out more by visiting About Incoda's Offshore Advisory Services.

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Q. What is the most significant issue in offshoring software development?

A. The desire to reduce IT costs continues to drive the demand for IT offshore outsourcing. However, IT executives in major countries and geographic regions such as the U.S., Europe, and Japan are frustrated about the lack of comprehensive and credible information on offshore suppliers. While there are thousands of IT companies worldwide, potential customers in the US and Europe see only the top few with the “deep pockets” to spend on marketing and advertising. The vast majority of offshore software development companies don’t have the resources to adequately market themselves overseas. Currently, there is no single source of information about these companies with enough detail for corporate buyers of IT services to make informed decisions about whom to invite for RFI/RFQ/RFP.

From a supplier perspective, small and mid-tier offshore software development companies—those companies whose revenues are below $200 million per annum and who are large and mature enough to handle sizable projects, have strong internal processes, and lower infrastructure costs—lack the visibility to virtually all of the IT opportunities that arise in the major countries. These companies are forced to rely primarily on their executives’ network of contacts in the target geographies to identify and secure business.

This lack of detailed credible information on offshore software development companies has restricted the growth of the global software industry.

Q. What is the vision for the Offshore Software Development (OSD) Resource Center?

A. Incoda’s vision for the OSD Resource Center is to provide a single, comprehensive, and independent information resource on offshore software development companies.

Q. What business problem does the OSD Resource Center solve?

A. The OSD Resource Center helps companies interested in offshore software development to find the best offshore suppliers for their specific software development projects. Historically, it has not been an easy task to find the right offshore company because:

There are thousands of offshore software companies to choose from and, before the OSD Directory, there was no single comprehensive list of offshore suppliers.
The vast majority of the world's offshore software development companies are very poorly represented, or not represented at all, by local sales forces in the US, Europe, and Japan. The cost for these companies to support just one local salesperson is often far more than the profit generated from several of their assignments.
It's impossible to evaluate a company from its website. Just like the saying "You can’t judge a book by its cover," we have found that the quality of a company's website is unrelated to the company's ability to deliver quality software. Several top OSD companies have disappointing websites and many award-winning websites belong to disappointing companies.
Before we launched the OSD Resource Center, there was no credible source of data on software development metrics and other important company evaluation criteria for offshore software development companies so that customers could make "apples-to-apples" comparisons. Differences between excellent suppliers and poor ones were not easy to see.
It is extremely difficult to evaluate qualitative factors, especially when the companies are overseas and have different cultures and customs. A high-performing software development project team is highly dependent on having the optimal mix of technical skills and experience in the areas needed as well as capable project management. Qualitative factors such as organizational fit, level and type of communications, and operating style are difficult to assess.
It's quite costly and time-consuming to conduct on-site evaluations. Visiting just four potential offshore suppliers—let’s say two in India, one in the Ukraine, and one in Argentina—would cost $10,000 or more and consume at least 10 days of travel time, meetings, and site tours.

The OSD Resource Center (and Incoda's supporting data collection, analysis, and validation methodologies and approaches) solves these issues and provides a one-stop online resource for offshore outsourcing customers.

Q. Is the OSD Resource Center unique?

A. From a buyers’ perspective, the OSD Resource Center is truly unique. Up until now, companies wishing to outsource their software development have not had a way to find and compare custom application development suppliers. The software industry is made up of thousands of small and medium-sized companies covering a multitude of industry domains, business processes and functions, operating systems, languages, and specialties. Many of the best companies located in offshore locations lack the financial resources to effectively market themselves in the major first-world countries. Incoda Corporation’s OSD Resource Center website offers buyers of software development services a single, online location, available 24/7, that contains all of the data, tools, and resources necessary to find the optimal offshore vendors for their specific project.

In fact, we believe that the OSD Resource Center is so unique that it will change the way software services are sold. The Exhibit below shows how sales of software development services will shift from a large supplier/large customer push model to a market pull-oriented model, whereby any size customer will have visibility to the entire worldwide software development market. This pull model is more efficient and will provide opportunities for market expansion to all sizes of software development companies.

Q. How does Incoda guarantee the quality of the supplier data presented in the OSD Resource Center?

A. Incoda’s process of data collection, validation, and verification is the best in the business. Incoda starts by collecting data using our own proprietary online questionnaires, which capture several hundred data elements per company. Each participating software company’s CEO or President signs the questionnaire to certify its accuracy and completeness. Analysts at Incoda Corporation then begin the process of verification. A combination of interviews and discussions with company management; extensive cross-checks using other research reports, additional published market research, reference materials, and independent sources; discussions with customers; and on-site visits are used to validate the data. Incoda then creates the most detailed profile on the OSD company that is commercially available.

Q. How does the OSD Resource Center support itself?

Q. Are the Company Profile Reports a good value?

Q. Why should I consider offshore software development?

Q. Who is Incoda Corporation?

Q. What are Incoda’s offshore advisory services?

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Still have questions? Here's how to contact us.

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