Hidden cost of outsourcing
Cost of selecting a vendor: Expect to spend an additional 1 percent to 10 percent on vendor selection and initial travel costs.Transition cost: Expect to spend an additional 2 percent to 3 percent on transition costs. Cost of layoff: Bottom line: Expect to pay an extra 3 percent to 5 percent on layoffs and related costs. Cultural cost: Bottom line: Expect to spend an extra 3 percent to 27 percent on productivity lags. Cost of ramping up: Expect to spend an extra 1 percent to 10 percent on improving software development processes. Cost of managing an offshore contract: Bottom line: Expect to pay an additional 6 percent to 10 percent on managing your offshore contract.