This chapter is an introduction to the subject of Offshore Outsourcing, complete with detailed descriptions including the pros and cons, which is a prerequisite for any successful project. (Source: "Offshore Software Outsourcing 70 % Savings " by Dr. Franz J. Beeler, Innovation and Venture Manager - Switzerland) Background According to groups of experts, the excess capacity in the IT and the Telecom industry still ranges from 15 to 20%, owing to the recession that has haunted the economy for almost 3 years now (April 2003 data). The status quo, with its ever-expanding selection of similar IT products and services, is leading to a fierce price competition. Over 50% of all software projects launched has been suspended or discontinued for good as a result of high associated costs. The national economy suffered a huge potential loss in this respect. Another implication is that a number of urgently needed innovations never came around. Beyond doubt, only highly developed countries with high living standards are able to keep their own increasing rate of innovation balanced. As far as developing countries go, the solution to this problem will be Outsourcing with high skill profiles and sufficient capacity in software development. Benefits of Offshore Software Outsourcing Regional benefits offered by Offshore Software Outsourcing: Reduced Costs In the IT industry, costs take the very top of the list of factors contributing to the timely arrest of recession and excess capacities. Reduction in personnel costs is of extreme importance here: when compared to developed countries, the magnitude of savings may reach up to 70%, depending on the type and size of the projects. Reducing fixed costs and improving flexibility: Offshore Software Outsourcing will help to reduce in-house staffing requirements. Thus, fixed costs will reduce in the field of R&D. In addition to cost benefits, a certain portion of fixed costs may be turned into variable costs in developing countries. That way, businesses can reduce their fixed costs and attain a necessary degree of corporate flexibility for the rapid market changes. Focus on the Core Business With the Outsourcing of the activity, you can focus all your resources on value production within the central scope of your competence, beside the Core Business. Time-to-Market and Quality Beside the obvious cost benefits, time and quality criteria are also drivers in Offshore Outsourcing. Finally, there is the availability of highly advanced software know-how with lower costs, a modern IT structure and the Guaranteed International Quality Standard, which are features that any ideal Outsourcing partner would provide without any condition. Choosing the Right Offshore Partner The following criteria should be met: project experience, reliability, clarity of offer, communication skills, local representation in the Client's country, references, company size and financial standing. Long-Term Agreement You can make the most of Offshore Software Outsourcing if it embraces a longer period. To keep it expedient, foreign specialists kick off the project at the site of the Client to mutually contribute to the initial discussions and to ensure adequate conveyance of knowledge and, last but not least, to build trust amongst all parties involved. Meanwhile, mutual trust becomes an important factor in long-term fruitful partnership because of the physical distance. Choosing the Right Project Not all projects can be suitably managed through Offshore Outsourcing. Tasks that are time intensive, clearly outlined and require delivery stretched out over a longer period of time. These are considered support and development projects. Development projects should set the primary focus on precise specifications. After that, the development such as that of software modules will be completed without any major problems abroad. Hypothetically speaking, the better the development process and methodology are engineered, the easier it is to succeed with complex software projects using external resources. Your Competition is Already Enjoying the Benefits! Regardless of how your opportunity in Offshore Software Outsourcing serves your company, your application is already being processed: in the U.S. alone, USD 5 billion worth of software has been developed using external resources in India since 1999, which represents a 20% share in the world market! These IT products, produced at very reasonable costs, are now flooding the West European market, which is now marching towards a higher level of globalization. Output If an Outsourcing Project clearly defines personal responsibilities and the rules to govern implementation and both contracting parties agree and sign on to those, nothing can stand in the way of delivering the desired results.

In addition to reliability and prices, another most important aspect in the execution of a development project is the necessary degree of availability of the developers. We are always at your fingertips and, if so required, we go to your door within a short time.

We suggest a number of business models as a function of requirements and the complexity of the project. Each business model allows for various account settlement arrangements. Time based account settlement   The classic way of settlement. It may be based on hourly, daily or monthly rates. May be adjusted dynamically. Discount rates are available depending on the duration and size of the project. Temporally limited settlement based on capped budget   Projects planned to cover a long span of time (over 1 year) may receive considerable discounts with this form of settlement. The fixed budget allocated for the given time period forms the basis of settlement, typically broken into monthly repayments. Settlement based on fix amount committed to a defined task    Under this arrangement, we provide a quotation for a specific job, complete with price and target date. The price being a fixed amount, it will not change even if the deadline does. The volume and complexity of outsourced (offshore) software development projects vary to a large extent from Client to Client. Accordingly, requirements and solutions differ, too. On this basis, we compiled 3 service packages that embrace the most important services that may be needed for an outsourced development project. This "a-la-carte" tailored approach is able to serve all of our Clients from microbusinesses to the largest global enterprises. Of course, unique packages may be put together using various components in the 3 models.

The basic model contains those essential services that are needed for any outsourced development project. Receipt and review of concept and job specification   What needs to be done? What is the task? - To questions like these, simple answers can be readily given verbally. In practice, however, the specification of the job and of the requirements in writing is fundamental. The job specification must cover a detailed process and technical description, which is to meticulously outline business and technological requirements. Preparation of a project plan   Who should do what, how and when? A very important document and the project schedule constitutes an integral part of the contract. It specifies the subprojects, the target dates, the people in charge on both sides and the inspection/acceptance procedure. Simplified document handling   In simplified document handling, we make a proposal concerning the format of two essential documents, the job specifications and the acceptance tests. We offer a solution for the consistent handling of documents (central document archive). Development in the desired development environment   Our staff of experts with extensive expertise will develop in any environment that is required by the project. The source code will undergo a rigorous check for quality assurance purposes. Functional tests with acceptance   The final step in each development project is a functional test, recorded in a detailed protocol. The protocol forms the basis of acceptance. The detailed description allows for the precise rerun of the newly developed program with the test data, making the results transparent for the Client and the job may be accepted and closed down. Simplified change management   Following the successful completion of a set of functional tests, the newly developed programs and program units will be integrated in the developed system and no further discussions or cross-checks are needed.

The services offered by the basic model are essential yet might not be sufficient to successfully complete a project. Using the services listed below, even a complex project can be tackled. Preparation of job specifications   There may be cases where further analysis is needed to prepare the job specifications. When that happens, our consulting services will assist you in producing the job specifications. Should you require so, we are prepared to produce them ourselves. Generation of process models   A crucial part of the job specifications is the generation of business process models, which are to pinpoint the business objectives of the given development project. Preparation of a technical plan   Using the process models and the development guidelines, we create a technical plan, to include the following sections: detailed design of data structures and database tables; proposed functions and objects; logical program running plan. Transfer of know-how   Once a development project is completed, a technical and/or operating manual is produced for the newly developed application and we consequently educate the Client and their staff about the software in training sessions and workshops. Standardized document management (using document templates)   We ensure consistency across all documents by making only one copy of each document modifiable (check-in / check-out); the pre-specified document templates cover all phases of the project.

These services provide efficient assistance to our global Clients, making it easy to integrate the operation of the developed software in the corporate structure. Discussion of specifics at concern level, preparation for making strategic decisions   In a complex, global corporate environment, the collation of development concepts and objectives always presents a much more difficult challenge. In an ERP system, for instance, that is interconnected with hundreds of other systems (which may imply several dozens of independent companies) the process of reaching a company-wide consent on issues requires vast amounts of preparatory work. Of course, in such processes, we manage the development projects on site and also provide support in the making of strategic decisions. Concern level process models   In a complex, global corporate environment, the complexity of processes may require that certain processes be analyzed in global context. A good example: if the reference number of an order is recorded and stored in a number of different formats within the same company group, the standardization of such numbers will necessitate a manifold process and system analysis. Company integrated document handling   We adopt the document handling system of the Client, deploy it in the project and may supplement it with bits and pieces to match the project requirements. We organize the necessary training and also carry out a quality assurance check. Company integrated change management   We adopt the change management system used by the Client and provide for our personal representation in the project meetings. A good example would be a Client of ours where the modification of a program required 7 acceptance procedures and 3 rounds of meetings under the prevailing system of change management.

We have gained extensive project experiences in a number of industries, businesses and technologies. Our project palette covers industries such as the automotive industry, the IT sector, the bank sector and real estate management while also covering technologies such as ERP systems, client/server architectures, databases and Intranet solutions across a wide geographic area (Switzerland, Germany and the U.S.).

Success in outsourced development needs mutual trust. Trust can only be built on reliable services. Therefore, we have always considered reliability a key factor in our work and it is a conscious part of our corporate policy. Reliability as a prerequisite comes from the operation of our Company; our quality assurance system, experienced managers, safety rules and corporate culture guarantee it.

It is Gamaxcom Kft.'s goal to fully satisfy the requirements of our clientele by continuously improving our software development and integration consulting operations. In order to achieve the goals we set, we developed and introduced a quality management system that meets the international standard DIN EN ISO 9001:2000. The attainment of this international ISO certificate bears out the high quality of services Gamaxcom Kft. is providing as well as the deployment and development capabilities of our Company in the field of quality management.

In our projects, we connect to information systems, potentially accessing confidential information. Our offices are equipped with safety and security systems and security cameras. The building is protected against unauthorized entry by admission codes. We are prepared to use a number of security protocols to guard Internet connections. If so required, we provide our Clients with a firewall complete with a security program and own port assignment.

We put extra emphasis on communication in our projects as we are aware how important it is to supply and access current information and to maintain active liaison throughout the duration of projects. Flawless communication is ensured by our highly experienced project managers.

Due to the central geographic position of Hungary, we are able to provide on-site customer support across entire Europe.

Without trying to provide an exhaustive list, below you will find the major projects to which our references are linked. For further project details, please do not hesitate to contact us: info@gamaxcom.com. Zürcher Kantonbank - Online Home Banking (www.zkb.hu) 2000 Production of the very first, basic edition of Online Home Banking. The system is one of the pioneer Home Banking systems. UBS Bank 2001 Development of an express archiving system. Volkswagen AG - Worldwide Distribution Center 2001 Introduction of Euro. Volkswagen AG - Worldwide Distribution Center 2002 Linking all distribution warehouses in the U.S. and Canada to the central warehousing system. Setting up interfaces, integration and optimization of processes. IBM - Outsourcing Center Hungary 2003 In order to fulfill many large-scale outsourcing contracts, each with a total value of several billion USD, IBM is setting up a number of Support Centers, in Hungary among others. The multiyear contract that ties up 150 of Gamaxcom Kft.'s staff will help IBM to complete these contracts with excellent specialists and in a cost-effective manner.