| One of the main points while developing your offshore | | | | team and simultaneously enjoy the benefits of |
| outsourcing strategy is choosing the right delivery | | | | offshore outsourcing. |
| model for your type of business. In this article we will | | | | 3. Global Shared Services Centres |
| talk about outsourcing business models, their types and | | | | Global shared services centres (captive centres, |
| advantages. | | | | offshore insourcing) are a combination of onshore |
| Dear Readers, | | | | shared services and offshore captive centres. The |
| We continue our series of articles about offshore | | | | global centre is run as an independent business, with its |
| outsourcing business models. This article is devoted to | | | | own budget and bottom-line accountability. |
| the second generation of offshore business models. | | | | Advantages: Global centres have guaranteed markets |
| For more information, please, read Offshore | | | | for their services, alleviate some of the organizational |
| Outsourcing Business Models. Part I | | | | issues such as control and politics that crop up when |
| The Second Generation of Offshore Business Models | | | | firms relocate back-office activities offshore to |
| Models of this generation tend to be more | | | | external providers. |
| sophisticated and to span multiple models of the first | | | | 4. Build-Operate-Transfer (BOT) Model |
| generation. | | | | BOT tend to build on first-generation ODC models. IT |
| 1. Global Delivery or Blended Outsourcing Model | | | | replicates "build" and "operate" parts from the ODC |
| In this model a company outsources to a multinational | | | | model and adds its own "transfer" part. This is how it |
| service provider that offers a mix of onsite, offsite | | | | works. It is typically built and managed in three phases. |
| onshore and offshore resources. The global delivery | | | | 1) Build. The offshore partner provides a complete |
| model allows vendors to innovatively distribute and | | | | solution for building a dedicated centre for a company |
| manage engagements across multiple global locations. | | | | in a particular country. |
| Advantages: Lower rate without risk, faster time to | | | | 2) Operate. The offshore partner provides a |
| market, saves a client from investing in a huge team | | | | comprehensive set of operational management |
| of employees for multilocation projects. It is a preferred | | | | services. |
| choice for large consulting companies. | | | | 3) Option to Transfer. The client has the option to buy |
| 2. Hybrid Delivery Model | | | | the entire operation after a fixed period. |
| The hybrid outsourcing model, also known as the | | | | Advantages: The clients are able to focus their |
| dual-shore model, combines onsite and offshore | | | | management time on their core business rather than |
| services and becomes the business model for | | | | operational issues. The risk of execution is minimized, |
| midsized service providers headquartered offshore. | | | | money can be spent on core functions. |
| The onsite team of the provider does all the | | | | 5. Offshore Multisourcing Model |
| requirements gathering and development of detailed | | | | Multisourcing is the practice of using multiple offshore |
| specifications, handles client-facing components of the | | | | business models and suppliers. |
| project. The offshore office takes care of the coding, | | | | Advantages: This model allows more flexibility, ideal for |
| testing, and bug fixing. | | | | companies that take risk-averse approach to |
| Advantages: near 24-hour work cycle; lower-cost | | | | outsourcing. Companies that are new to outsourcing |
| resources; this model enables the client to directly | | | | tend to multi source until they are comfortable with the |
| interact with the service provider through the onsite | | | | whole process. |