While setting an offshore development center (ODC) in India many Multi-national Companies run into a number of problems. In the last few years many multinational companies who started their Development Centers in India have reconsidered their decision because of cost control and Human Resource Problems. These companies face problems mainly because of:
Lack of Understanding different cost components and inaccurate budgeting.
The commitment and relations required with different departments like Finance, Human Resource, and Legal etc.
Inability to understand the complexities involved with Human Resource Policies and Human Resource Hiring of Development Center.
Not taking Legal and Statutory requirements in India seriously.
Underestimating the execution phase requirements including Hardware/Software acquisitions, Real Estate and IT setups etc.
So taking these problems into consideration we have formulated a model as how easily and quickly a multinational company can set up its Software Development Center in India without Running into any problems.
A corporate Entity in India is required to be Incorporated and Registered under Companies Act 1956 and this process is expected to take two or three weeks. This involves a number of legal and other issues because multinational companies are required to comply with Companies Act 1956 Specifications so that they can establish their Operations in India. Companies are required to submit certain forms and documents to the Registrar of Companies (ROC) and to take the approval as well. Also they can get a Software Technology Park of India (STPI) registration that is on their own discretion because it is not mandatory although it provides a lot of benefits like Tax relaxations including Fringe Benefit Tax (TAX).
Multinational Companies planning to set up their subsidiaries or Development Centers should give due attention to setup infrastructure. This Includes Identifying the Geographical location or place of their operations and the properties needed for such operations, also the Information technology equipment and other machineries required for the smooth running of business in India. Designing of the business structures offshore should also be taken into consideration.
This is the step where you have to consider your Organizational Structure and applying it overseas to your Development Center. The Organizational Structure for offshore operations should be in line with your Company’s Organizational Structure. Business Processes should be defined and there should be a common understanding of them. The security and Business Continuity is also of key importance here as they cannot be compromised at any cost.
Human Resource Setup:
Last but not the least because this step requires most attention and time. There should be a thorough analysis of Human Resource Requirements and how they can be full filled. Policies and Processes should be formulated to achieve smooth and effective hiring of Human Resource. Also there should be a model of Performance analysis with clearly defined guidelines and Rewards.
India is one of the best location for outsourcing and setting up subsidiaries and other departments like Development Centers but it is important to plan such venture carefully taking all aspects into consideration in order to ensure its success.
If your company is looking to setup dedicated offshore development center in India or simply Hire Developers, then please connect with Aalpha and we will be glad to offer free consulting cum proposals for your projects.