Virtual Captive Center

In the recent years the concept of "virtual captives" has emerged and gained acceptance of the global sourcing community. A virtual captive center is a hybrid model that combines the features and advantages of offshore captive centers and outsourcing models. Virtual Captives bring tremendous benefits but are not suited for all outsourcing initiatives. They are not a model for low value-added processes or for small-scale outsourcing initiatives of less than 40 people.

Outsource software solutions through Virtual Captives are good for clients that think of outsourcing as a long-term strategy. These centers will function as extensions of the parent organization and will drive substantial customer value.

Silicus Virtual Captive Center Solutions

For Silicus, a virtual captive center is similar to an Offshore Development Center, except for differences in pricing of services.

In a virtual captive center, Silicus shares resource and administrative costs with the client. Silicus prices its services on a cost plus model.

Service Cost = (Resource cost + Infrastructure and administrative costs) + management fees

Besides cost reduction, virtual captives enjoy all benefits of a Silicus run and managed development center:

• Greater flexibility and continuity of staff
• Guaranteed setup time, option to start operations almost right away by using available infrastructure of the supplier
• Quicker ramp-up and lower operational risk in setting up operations
• Leverage vendor's skills and experience in recruiting, training and retaining skilled staff
• Retention of intellectual property and business knowledge due to dedicated resource base
• Consistent understanding of customer's products, goals and working practices by the remote team
• Generally shortened learning curve in the long-run
• Improved communications and potential for methodology improvement