top 5 emerging trends in it outsourcing contracts
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Selecting an appropriate business model is a crucial factor in ensuring offshoring success. There is now plenty of outsourcing models such as blended, hub & spoke and remote dedicated staff available in IT to suit your unique business needs.TRANSCRIPT
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Top 5 Emerging Trends in IT Outsourcing Contracts
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Various outsourcing business models have evolved to suit unique business needs of companies. Broadly, there are five forms of IT outsourcing contracts:Blended or global service delivery modelHybrid delivery modelBuild-operate-transfer modelHub & Spoke modelRemote dedicated staffing model
Outsourcing Business Model
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Blended Or Global Service Delivery Model
This is suitable when resources are scattered in various geographical locationsA resource provider manages the clients' servers, networks and monitored business processesThis allows you to implement follow-the-sun strategy You are better prepared to deal with an unanticipated situation such as a natural disaster or a terrorist strike Large corporations like IBM, Accenture and CISCO follow this model
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Hybrid Delivery Model
This combines the elements of both offshore and onsite delivery models to provide the best of both worldsThere is a local team stationed onsite to handle the client-facing components such as requirements gathering and user-interface development Other functions such as development, testing and bug-fixing are done offsiteThis is a preferred model when a project is complex and is expected to last for a longer period of time Direct interaction with clients helps a vendor to better understand their requirements Whereas clients get complete benefits of offshore delivery model
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Build-Operate-Transfer Model
A third party establishes an offshore center and operates it for a finite time period after which the ownership is transferred to the client firm.It is beneficial when a firm wants to establish a captive center, but lacks the local knowledgeIt is also a suitable outsourcing model for those companies that lack domain experienceThis saves companies from the headache of building their own captive centerIt is a relatively costly model
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Hub & Spoke Model
There is a Hub that performs the critical business functionsThere are three or four delivery centers (Spokes) to support the hubThese spokes have a very specific objectiveIt is more suitable outsourcing for those IT firms whose operations are scattered across multiple locations
Remote Dedicated Staffing Model
A vendor provides your dedicated employee along with office space, hardware, software, IT supportThese facilities help you to reduce various overhead expensesYou can start by hiring a single remote dedicated employeeIt is easy to increase or decrease the employee strength as per your needsThis scalability gives you the ultimate cost advantage
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Find Out The Outsourcing Model That Suits You
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