Today Outsourcing is not an option, it is an integral part of big companies to carry out their business activities. Fortune 500 companies are no way separate from the mainstream IT companies. The fact is, almost 94% of Fortune 500 companies are outsourcing one of their major software development product to the Asian countries.

Matrix Marketers, which itself is outsourcing its work realizes the importance of concentrating on building the core strengths to develop its business. The company is relying on its outsourcing partners in India for its software development.

Here, in this post, we are discussing the time when fortune 500 companies should outsource and the details of outsourcing.

When does outsourcing make sense?

To get success in the business world, the organizations perform three major activities: finances, core business management, and product development. Outsourcing can reduce expenses, control costs, preserve capital and/or avoid additional investment expense. Any area that is not a core function of your business, outsourcing will make your organization more competitive. outsourcing can provide flexibility, improve the level of service, give the company new talent, or help solve problems stemming from the increased complexity of technology. This is the good part of the story.

But a lot of challenges are involved in carrying out the outsourcing activities. To stay competitive, a company must outsource non-core aspects of their business, because each partner brings their “core competence” to the effort, making it possible to create a best of everything organization. As a result, all functions and processes could be world-class – something that no single company could achieve.

A real-time case study was conducted by the experts of fortune 500 hundred companies on IBM and it ‘s poor marketing policies then. An outsourcing process to offload the workload which led IBM to turn into a giant business company by developing large volumes of software in various streams and verticals.

Finally, they were able to change their weaker business competencies to invoke positive impact on the other companies.

• change. A decision was made to outsource the function of having a call
• center – to improve their cost structure while retaining their world-renown
• quality service. The outsource allowed executives to focus more on the

The successful outsourcing of software development services into IBM’s corporate structure required that all developers receive training to develop the required product knowledge and customer skills to act as a manager

The results drawn from the study are very dramatic:

– Cost of customer contact reduced 97%
– Shortened the field sales cycles up to 80%
– Generated 125% of goal for leads
– Exceeded customer expectations 78% of the time – based on a customer
service satisfaction survey.

These indifferent results show the competency of the outsourcing model. Another pattern which is closely observed in outsourcing is that long associations of two outsourcing partners bring better results in terms of product development. An understanding of the two teams is developed over a period of time despite having discrepancies in culture, working culture, timings and so on. This draws another result in outsourcing that the companies must try to outsource to one or two company. After some time, the companies will start behaving as extended teams and a coordination will be set. Once this kind of understanding is developed, the outsourcing process becomes fruitful.

Other Than IBM, many another fortune 500 companies can be named who have made a place for themselves in the software market including big companies like Microsoft, Google, etc.

The third point which the developers of Matrix Marketers have observed in the process of outsourcing is the misunderstandings and communication gap among the teams. Normally, two project managers of the companies chat and discuss project details and when they convey the information to their teams respectively, the meaning of entire communication happened is complete changes. A well-documented outsourcing process can help you to overcome the hurdle and go for a successful outsourcing plan.
During the outsourcing process, make sure that the basic qualities of software development like responsive nature, code quality, the load time of applications, development using latest languages, etc. must be maintained.

Conclusion

As of now, fortune 500 companies are enjoying the benefits of outsourcing and growing in their core businesses. The trend continues and many success stories support the use of it. Now it is Up to you that how your company should go about outsourcing. Again, we come back to the main point that to remain in the competitive business of today, especially software development, outsourcing has come up like compulsory activity. Outsourcing to countries like India is the latest trend of fortune 500 companies.