Case Study:
Turnaround using offshoring as a strategy
Company
Mid-sized
Silicon Valley Company
Challenge
Company
revenues began plummeting due to a change in market condition from $100 million
a year to $75 million a year. But the level of support for existing products
needed to be maintained. In addition, the company needed to introduce new
products and features to stay competitive. As a result, R&D and support
costs as percent of revenues went from 36% to 56%. Company’s survival came
into question.
Solution
Offshoring
of product development, support and IT; company established three offshore
centers in strategic locations. Over the course of the next 18 months the
company restructured product development, support and IT across the three
offshore locations and
Results
n
Reduced
engineering, support and IT costs by 40%
n
With
the same budget, company now supports 3 more product lines in addition to the
one product line that existed prior to offshoring
Global Development Consulting, Inc. provided advisory services for this company to use offshoring strategically.