Outsourcing, especially off shore, provides substantial cost savings to the companies. They can acquire specific experts at the time they need them and also save some money because of salary differences in the remote geographic location. However, the company does not have control over the development process and really is taking a lot of chances that the development will be completed in time and according to spec. Doing outsourcing to remote location makes the situation only more complex.
Usually offshore development methodologies require outsourcing of entire projects or their components to local companies in the offshore location. The management of such outsourcing is always a challenge because of the remoteness combined with lack of direct control over actual developers of the code. The cost of implementing the project is much higher than just staff salaries, since the company providing services is obviously generating revenues from the project. The development staff is moved to other projects after completion of the client's project, and the unique knowledge gained by them during the development process is lost to the client.
VEL Technologies offers a different way of managing offshore development. Instead of outsourcing a specific project to the local company, the client, with VEL's assistance, establishes its own local development center and utilizes VEL's expertise to manage this center from the US. The cost of running such a center is a fraction of what it would cost to maintain similar staff in the US and the productivity of the team remains the same. The client remains in complete control of the project, since now it is executed by its own employees, and has options to increase the size of the center, further reducing the costs of its technology development.
Options for Remote Development Compared to In-House Development
The table below provides comparison of different remote development options with in-house development.
Comparative grid of remote development options.
| US Based In-House Development | India Based Outsourcing | VEL's Remote Development Center | |
| Low cost |  |
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| Control Over Development | |
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| Retention of Knowledge | |
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| Continuous Development Cycle | |
Advantages of Proposed Approach
The approach that VEL Technologies proposes to clients combines best elements of both onshore in-house and offshore outsourced development:
- By assigning the majority of the development tasks to St. Petersburg, Russia the costs associated with the personnel are reduced drastically.
- Specially trained personnel in the US are providing an efficient interface between the development team and the internal consumers of the software.
- By actually owning the development center, the customer is ensuring that the resources are allocated in the most efficient manner.
- Because the remote personnel are actually employees of the customer, the effort spent on training and acquiring the domain expertise stays with the customer at all times.