Resource Origin:  neoIT/Neo Advisory

“Key issue: What areas, especially beyond labor costs do enterprises need to consider in order to develop accurate financial scenarios for their global sourcing initiatives? While labor rates can be 70 to 90% lower in offshore markets, most firms save only 25 to 50% on their global sourcing initiatives. This white paper will help you understand the components that should be considered to arrive at accurate financial scenarios for offshore success.

neoIT recommends that enterprises clearly understand and identify the various components of cost that together comprise the Total Cost to Offshore in order to meet the following objectives:

– Understand the true cost savings expected from the offshore sourcing initiative;

– Measure the relative financial impact of sourcing from different regions, and compare with commensurate risk;

– Appreciate how different trends in the global markets impact cost (not just wage rate fluctuation);

– Plan for appropriate risk mitigation strategies commensurate with location and process risks

– Effectively manage the overall financial impact, by managing holistically, rather then focusing on only one or two obvious components…”

Contributors: Open Source
Categories: SIG U Resource, Whitepaper
SRC Type: Outsourcing