Swiss-Indian Co-operation in the Area of Offshore Software Development
Written By Waseem Hussain
In the mid 1990s, large corporations in Europe and the USA realized there was a huge lack of skilled software engineers. The need to solve the Y2K problem within a short timeframe, combined with unsuccessful education policies of the respective governments were two of the major causes for the increased demand. In addition, the gaining impetus of globalization produced a common management dogma:
„Speed up at high tech but low cost, and grow along large scales.”
Also Subcom of the erstwhile National Transport Group (NT Group) followed this trend. To quote a senior manager’s public presentation: “The Customer is demanding more, faster and at better prices while Subcom is struggling to recruit specialists in reason- able time to satisfy this demand.”
The demand was met with supply from India, where it was mainly the private sector which promoted its capabilities. The Indian suppliers offered their ser- vices with a high sense for customer satisfaction and very attractive pricing (supposedly up to 60% cheaper than in the client’s economies). The offered know-how was said to be mature and readily avail- able.
Subcom’s strategy to overcome its resourcing prob- lems was to enter a strategic co-operation with a newly formed company called Indian Software Ser- vices Company (ISSC). In 1999, a frame agreement ‘for the provision of computers services’ was signed, followed by a MOU (memorandum of understand- ing) on the formation of a joint-venture and, subse- quently, a business co-operation agreement. The joint-venture agreement was signed in the year 2000, through which ISSC was to hold a block of shares of 60%, and Subcom 40%.