A well integrated, global corporation of the 21st century will look much different than the corporation of today. In order to compete in the future economy, the truly transcontinental company must employ a set of standard business processes globally and act as a completely integrated unit, rather than a collection of independent and self-sufficient entities across the globe. Current research from the META Group indicates that "No Global 2000 organization can ignore the impact of increased globalization. Yet, typical organizations are struggling to articulate an enabling business/technology strategy and architecture to compete successfully in the integrated, global 21st century information economy."
One strategy that a transcontinental firm can employ is the use of a global development center to provide strategic and innovative technology solutions for its global clients. As an extension to in-house development teams, the global development center can deliver large-scale, time-critical solutions to clients anywhere in the world.
Offshore development facilities, often located in India and Israel, are solutions that many consulting and systems integration firms are turning to for "round-the-clock" coding. These corporations are investigating offshore development services in order to save money and to speed delivery, as well as to gain access to resources not available internally. The Year 2000 crisis and the demand for enterprise solutions are other major business drivers. However, as demand increases, Indian salaries are increasing, supply is dwindling, and users and vendors are looking toward Asia as a viable alternative.
A global development center is not just another term for offshore development. It offers much more than just coding and software development. Sophisticated projects and complex business systems can be run through the center to shorten time to market and provide quick delivery within a standardized methodology. In short, a global development center can be used through the entire development life cycle of a project.
Corporate rebuilding has massive social and national implications. Whereas America used to be the "melting pot," the whole planet is now the melting pot. Nations thought of as "Third World" are industrializing. Countries with reengineered enterprises will pull ahead of those stuck with traditional enterprises. Parts of the world that have vigorous new growth and skilled, inexpensive employees (China, India, Indonesia and the Philippines) can be tapped by enterprises who wish to become truly transcontinental. The experienced workforce, cost advantages and ease of doing business make the Philippines a particularly attractive option and worth investigating as a location for a global development center. Filipinos, for example, are very adaptable to other cultures. They are extremely energetic, eager to please clients and have an insatiable hunger for learning. They are thrilled to have access to training, education and advanced technologies. Revenue earned from a global development center in this country helps both their economy and the global corporation. Through the transfer of knowledge assets, the Asian world is learning and benefiting from Western knowledge, as well.
A global development center can offer many benefits, such as 1) savings can be passed on to clients, with savings being due to decreased development costs resulting from lower wage rates; 2) project delivery time is compressed with development resources working 24 hours per day; 3) project quality has the potential for being consistently high, since it is often ISO 9000 certified; and 4) margins and profits for the corporation increase.
An Australian engineering firm was developing a contactless smart card system for the Hong Kong transportation authorities when its software contractor pulled out. The new consultancy that was hired by the firm to provide a full-phase solution brought its multi-site development expertise to bear and assembled a "virtual software house" of three separate software development teams. One of the teams was based at its global development center in Manila to build the system software. The other teams were based in Hong Kong one for installation and testing, and another to perform independent verification testing of the integrated software and hardware solution. In this respect, the consultancy was able to bring the combined weight of more than 200 IT professionals to address the client's needs a rapid, highly efficient cyber-development effort. The result was the world's first, and still largest, transportation smart card system that successfully processed more than 1.5 million users on the first day. Six months later, the daily total neared 4 million users.
The entire process of converting information technology into a business solution is changing dramatically. New technologies such as the Internet create opportunities for business applications that were inconceivable only a few years ago. As this transition continues, the nature of systems development is likely to change dramatically. The major forces driving the demand for application development services are skill shortages and the constantly decreasing life cycles of new technology. Consequently, many companies will be looking to global development centers to meet these needs. They will begin to view offshore development as a strategic means for focusing the business on its goals instead of simply a way of cutting costs.
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