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The Resources Available via a Managed Services Offering
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Managed services providers usually have a whole host of different resource options available to support your company Depending on your needs, different resource options should be employed These include (in general these costs increase as you move further down the list): Offshore Near-shore Onshore Remote Onsite
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Offshore
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Traditionally offshore is just that; the host company provides requirements (whether these requirements have detailed technical specifications or not is a subject of debate many of these managed services companies will take simple requirements and provide detailed technical specifications from that) that are then coded offshore for a fraction of the cost Although many people immediately think of India as the center of this model, there are countries in Asia and Europe that also play into this equation For ease of definition, we should define offshore resources as any resource that is across an ocean and doesn t work directly for your company
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Pros
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Offshore resources are extremely economical Often, you can acquire three or four offshore resources for the costs associated with an internal resource, and again, these resources are for a limited time Once completed, your company is no longer obligated to use these resources, allowing you to flex your workforce based on the needs of the organization
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Appendix B:
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Offshore, Near-shore, and Remote Development
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Often, however, offshore resources have language and productivity issues We tracked one company that was experimenting with offshore, second-level application support answering a backlog of user issue tickets When this offshore group was tightly managed by one of the company s managers, the managed services provider completed a good number of tickets daily When the group was left to their own devices, the number of tickets dropped significantly When they were confronted by management, the number of tickets solved went up again This type of productivity issue is relatively common with offshore managed services CAUTION Out of sight, out of mind When the cat s away, the mice will play Unfortunately, both of these sayings are relevant when using offshore IT resources Language barriers will often create issues for full productivity from your offshore resources We definitely recommend significant due diligence surrounding any work or work product created using offshore managed resources Though it is often in the same language (such as English), people s cultural bias and understanding of the language will often cause issues that result in solutions that don t address your organization s needs
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Near-shore
Because of the issues surrounding having the development resources coding while you were asleep (this is both a benefit and a detriment) and the rapidly increasing costs of offshore managed resources, many companies are now looking into and trying a variation of the offshore model where they still push IT activities to other countries, but they do so using resources in neighboring countries that are simply cheaper due to economic situations An example of this is where people in the US might leverage IT resources in South America similar time zones so issues can immediately be addressed; often they are slightly more expensive, while other times they can even be cheaper than the resources offshore (Indian companies are suffering a decrease in economic effectiveness because of an increase in the value of their currency, increasing standards of living for their people, and an increase in competition for a scarcity of human resources) Often, these near-shore resources are more willing to work with your company as opposed to setting a series of artificial requirements around the work performed In essence, these near-shore resources are often easier to deal with than the offshore resources due to their hunger to tap into this new market and their lack of experience in working under these arrangements
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