Offshore outsourcing is not that you call in the provider, tell him the job and put your feet up and relax. Successfully managing offshore contracting requires substantial attention, discipline and interaction. According to the Giga Information Group, "Only those companies with significant programming requirements and software process maturity have traditionally entered into substantive offshore contracting relationships." Success does not happen overnight. One needs to believe it will add value. And a disciplined approach to project management is the key.

Target Corp has been Outsourcing since 1993. It is America’s fourth-largest general merchandise retailer, operating 1,200 stores and 19 distribution centers across the United States. It has been outsourcing offshore in order to reduce costs, has 16 projects with offshore components and 12 moving in that direction.

According to Randy Kirihara, senior manager, Target Corporation, "Offshore outsourcing is not easy, it takes time. Senior management commitment and follow-through are critical." And that commitment is now beginning to manifest itself in increasingly larger number of companies. West Group is an example where top management is firmly committed to outsourcing offshore.

In this process, provider partnerships are critical. And Fortune 1000 companies are looking to build them long-term. They are trying to build them senior management to senior management…and man to man.

Destination India

India is clearly the preferred destination for IT outsourcing. But we need to get off tehelka and take some quick and fundamental decisions for the country as a whole. We are ahead on the road to the future, but competition is catching up. Ireland, the Philippines and Israel are the ones to watch. And then there would be China and Russia to contend with. For us, people have always been the strength. But in IT outsourcing technologies, trends and tactics keep changing constantly, and we need to be in position to continue to leverage, in order to maintain and strengthen our position.

Today, India boasts 250,000 software professionals, with 70,000 new graduates coming out each year. Of the 250,000, 60% have five or years more of experience. The challenge is in nurturing more project managers, and people with business skills. High growth rates continue to outstrip supply of experienced project and program managers. Processes are going to be critical. As client organizations would be looking to get better quality products and services at increasingly lower costs, a typical customer asks these three basic questions when selecting a service provider:

• Is the provider a viable and stable supplier

• Does he have the required delivery capability and

• Is the pricing model competitive?

As many as 170 software companies are ISO 9000 certified in India, and another 150 are targeting this certification More than the certification, it is important that Indian providers achieve the required market positioning and strategic direction, have the extent, flexibility and quality of management processes, and are able to build in inflation guarantees.

Infrastructure and environment are key issues too. Infrastructure issues of power, transportation and telecommunications within the country need to be sorted out. Internet penetration is still in its infancy. Bandwidths are a joke. The opportunity for India is huge, but we need to tighten our belts and put our best foot forward. The India Inc brand needs to be constantly marketed.

Ishan Ranjan is VP, projects, CMIL. He has also been founder-editor of Voice & Data.