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Does a hybrid offshore IT outsourcing model make sense for your company?

Stephanie Overby | Dec. 9, 2013
In theory, a hybrid offshore deal combines the best of pure outsourcing and a captive IT services center. In reality, it's more complicated -- and not for everyone.

A virtual captive may require more management oversight than some customers anticipate. Both models also require extensive change management, says Karthik. "If you don't manage that well, these hybrid models can fail."

A hybrid model may make sense for those companies that seek the benefits of a captive center, but do not have the in-house capabilities to set it up themselves. But Karthik advises companies to make sure it's the most appropriate decision long term.

"You may be better off with a [captive] or outsourced model," says Karthik, who estimates that hybrid centers account for 10 percent or less of the outsourcing market. "Tread with caution."

Those that choose to pursue a hybrid model should get all stakeholders on board first. "This impacts both the business users within the company and the end consumers of the company," Karthik says. "Think about that impact and align internal stakeholders."

It's also important to build a fully loaded business case; a hybrid model is not a hands-off effort. "Do not underestimate the effort of managing this," says Karthik. "[You also] have to choose the right service provider and create a long-term vision."


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