India as a business location?
How reliable is India as a business location? Using the example of DRC Systems from India and DRC Systems USA LLC, we have already shown that working with Indian companies is not easy.
A report from 2013 shows that the country does not treat even large corporations with leniency. The legal system is complex, proceedings often take many years, and contractual agreements are not always enforced as expected.
Our experience with DRC Systems confirms this: when selecting an offshore development partner in India, the utmost care is essential. Only pay once all agreed services have been fully and satisfactorily delivered.
India as an offshore location for software development
For years, India has been one of the world’s most important locations for IT services and offshore software development. Many companies outsource development projects there – primarily because of the comparatively low costs and the large number of IT specialists. However, these advantages do not automatically mean that a project will run smoothly. Our own experience with DRC Systems shows that initial cost advantages can quickly be eaten up by delays, quality problems and contracts that are difficult to enforce.
What clients should pay attention to
Based on our experience, a few practical precautions can be derived that may reduce the risk when working with an offshore development partner:
- Milestone-based payments: Only pay for parts of the work that have actually been delivered and accepted – not in advance.
- Written acceptance: Define measurable criteria for when a service is considered to have been delivered as agreed.
- Place of jurisdiction and applicable law: Where possible, agree on a place of jurisdiction or an arbitration clause outside the contractor’s country.
- Check references: Talk to former clients and consult independent reviews.
- Source code and access: Secure access to the source code, servers and all login credentials from the outset.
These notes are no substitute for legal advice, but they can help to limit typical risks at an early stage.