iToom, an Ann Arbor, Michigan based business incubation service, reveals a new business building process that allows small companies to start their own offshore operation (subsidiary) in India with as few as 3 employees without an upfront investment.
Ann Arbor, MI (PRWEB) October 26, 2005 -- iToom, an Ann Arbor, Michigan based business incubation service, reveals a new business building process that allows small companies to start their own offshore operation (subsidiary) in India with as few as 3 employees without an upfront investment.
"iToom stands for IT-Offshore-Ownership-Model. It was created to give small companies a no-risk alternative to using offshore outsourcing contractors. Until now, the upfront investment, required overhead and the time to get started were a huge obstacle for small businesses to start a subsidiary in India. Many businesses know they have to consider some offshore activity for competitive reasons, but don't feel comfortable using offshore contractors," says Thomas Schramm, VP of Business Development at iToom. "The iToom business incubation process lets a small company respond to globally changing markets just like a Fortune 100 company does."
iToom's services can be used by companies in need of IT services, software engineering, web design, help desk, call center, managed services, database administration, application deployment, QA, telemarketing, sales, etc.
The top 8 advantages for ABCorp, an iToom client, on its way to establish ABCorp (India) using the iToom business incubation process:
· ABCorp saves 78% over U.S. costs. The savings would be 45% or less using an offshore contractor. ABCorp starts with 3 offshore software engineers and will save over $937,000 over U.S. costs over 5 years. Savings would be less than $545,000 if ABCorp would use an offshore contractor.
· From the beginning, the workforce in India is under ABCorp's management. The workforce is on iToom's payroll until ABCorp (India) is legally established, then transferred onto ABCorp's payroll. If ABCorp would use an offshore contractor, the contractor might reserve the right to reassign employees to another client's project.
· The software engineers' work is at all times ABCorp's intellectual property. Contractors transfer intellectual property rights usually at the end of the project or contract.
· ABCorp implements their data security and safety procedures. They decide to keep all critical data on their servers in the U.S. at all times.
· ABCorp extends its employee manuals, evaluation procedures and incentive programs to the new subsidiary to make the new employees a part of the organization. Additionally, communication guidelines to minimize misunderstandings between the different cultures are added to the employee handbook. Contractors usually have their own management style, company culture and communication guidelines. They also serve many customers at the same time.
· After 5 months, ABCorp decides to expand the operation in India with QA, additional help desk to offer 24/7 support to its U.S. customers, and database administration services. A contractor may specialize in software development or business process outsourcing. They cannot accommodate all of their customer's needs.
· ABCorp (India) applies for and receives a 10-year income tax exemption from the Indian government. This saves additional money that is used to develop new products to make the company more competitive, profitable and a market leader. The income tax exemption is not available to companies working with contractors.
· iToom initially started ABCorp's offshore operation within 1 week. iToom provides the infrastructure and puts the people on its payroll until the client's subsidiary is legally established. iToom will then rent the office space to ABCorp, additionally, payroll and other administrative services are provided at local rates to keep the offshore overhead for ABCorp to a minimum.
ABCorp plans to double its workforce in the U.S. and in India. The iToom white paper "13 Offshoring Pitfalls and How to Avoid Them", which can be downloaded for free at http://www.itoom.com, was used as a template to write ABCorp's communication guidelines.
iToom, LLC is an international marketing and business development firm based in Ann Arbor, Michigan. We strongly believe in the importance of a competitive, innovative and profitable small and midsize marketplace.
Contact: Thomas Schramm, 734-846-1950, iToom, LLC, 3118 Tiger Lily Ct, Ann Arbor, MI 48103
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