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Total Cost of Engagement
Just as hardware or
property purchases have a Total Cost of Ownership (TCO), consultative
arrangements also have a Total Cost of Engagement (TCE). Total Cost of
Engagement includes both direct and indirect cost.
Direct Costs:
Indirect Costs:
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Cost to maintain
resources on-site to manage offshore/nearshore project team.
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Cost of overtime to
keep US resources working simultaneously with offshore/nearshore
resources. |
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Traveling Cost to bring
resources from offshore/nearshore to US. |
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Productivity Lost due
to difficulty in communicating between on-site and offshore/nearshore
project teams. |
With its nearshore model
Azertia can provide a lower TCE as compared to offshore destinations.
In a
recently concluded user study by Gartner titled "Total Cost of Engagement (TCE)
Offshore vs. Nearshore," three engagement models were evaluated on
parameters such as direct cost, indirect cost, productivity losses cost and
risk/convenience cost. The results indicated that for a U.S.-based customer,
cost could be significantly lower when processes were outsourced to a
near-shore destination such as Mexico rather than to an offshore destination
like India, under certain circumstances.
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"The future for Indian IT
service providers is to consider co-opetition with the emerging nearshore
destinations to garner a larger share of the global opportunity"
Rita
Terdiman, Vice president and research director for offshore sourcing at
Gartner |
