Independent Small Vendors (ISVs) should outsource instead of developing captive centers for development in different countries but how to deal with the issue of intellectual property rights is the main concern of this article.
The Hybrid model
The model merges the comfort level in a captive development center with benefits of getting the services of a third party vendor to fulfill the needs of the organization. For example if an ISV wants to set up a captive center to meet local requirements it should do so but employ third party resources to manage that center. By doing so the company will not loose the strategic control of the center and achieve the desired objective. Standard processes, staffing and the necessary competencies to run it can be outsourced to a particular agency and the functioning can be monitored at the center.
After the infrastructure had been developed by the ISV it takes over the core competencies of the business and the non-core operations are handed over to the third party. Non core activities could be different from company to company but every business has to employ proper management professionals for its different departments, thus this work could be outsourced to an agency and it will be accountable for it. The hybrid model offers lots of advantages to the company adopting it together with having control over the functions of the center.
Advantages of the Hybrid Model
Quick Start up Capability
The start up time of an offshore center is reduced considerably if the hybrid model is employed by the company. The offshore software vendor can help in developing the center’s facilities and infrastructure. This has a significant impact on cost and time to make a product.
Time to Time Market
The offshore development center will provide the ISV with scale to accelerate product development by leveraging large talent pools. As most offshore service providers have a distributed presence across the globe, they can provide access to regional markets much more quickly and in a cost efficient manner.
Ability to Retain Talent
The quality and variety of jobs which the companies can work on are numerous. Increased exposure to different types of jobs will train the professionals in a way to adapt to changes easily and work in different dimensions for the ISV. The career development of the individuals is possible in such centers and a proper career path can retain talent in the company. Offshore centers have diverse curriculum to impart training to its employees. This training will help in developing the skills of the employees resulting in better quality service by the ISV.
IP Protection and Compliance
Apart from physical measures, offshore development centers have well defined security policies in place, which are regularly audited. A standard non-disclosure agreement that covers issues related to IP such as patents and trade secrets can be mutually agreed. The ISV can dictate terms by specifying with which competitors it can work or not.
The model provides a good ground for increasing business for the ISV and if applied appropriately and implemented to the best possible way can be a success factor for the ISV.
Shahbaz
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