Frequently Asked Questions
1. Why is Pune a good location for an ODC?
Pune has the benefits of good availability of engineers and relatively low costs for leasing office space. The churn of employees is low in comparison to other cities.
2. How can we start setting up an ODC?
Your company needs to decide the model of its offshore activity. A captive ODC should be planned only when there is total buy in within the company. This model involves upfront investments and a long-term commitment.
After the companies decision the whole process can be handled by Sprye.
3. What is the typical size of an offshore operation (in terms of employees) that is established?
All operations start at a low level. They gradually grow to an operation of 30-60 people. A few of our clients have grown to about 400 employees.
4. How big does a company need to be before it needs support staff?
The need for support staff is felt at a size of about 100 people. For companies that are smaller, Sprye can handle the HR for all recruitment and payroll. Accounting can be completely outsourced and managed by Sprye. Systems Admin can be outsourced and managed by the local senior management.
There are a number (approximately 20) of Government registrations that are needed in India at both the State and Central level.
The registration process is straightforward if conducted properly and in the right order with the correct documentation.
6. What are the approximate costs of office space in Pune?
The rates for fitted out office space vary from Rs 60 per sq. foot per month (psfpm) to Rs 80 psfpm. For fitted out office space landlords generally expect a 3-year lockin period as the office is furnished to the specifications of the tenant.
Unfitted out office space is cheaper. However fit-outs typically cost approx. Rs 800 - Rs 1200 per sq. foot. Space is calculated, as Built up area and the usable space is approx. 25% less than what one pays for. A significant lease cost is the refundable security deposit, which is about 6-8 months rent and is only refunded when you vacate. Realtors charge both parties one-month rent for identifying and giving out space.
(Exchange rate is approx. Rs 80 to $1).
7. What is the typical salary cost at different levels?
A fresh engineering graduate from a good school is roughly $6,000 p.a. (Rs 48,000 pm), a software engineer with 3 years experience $10,000+p.a. (Rs 80,000 pm), a Project Manager with 7 years experience $20,000+, (Rs 160,000 pm)
8. How fast is a typical project?
Operations could commence in 1-2 months. The speed depends on the availability of resources (money, people, and equipment) and most of all decisions from the parent company. The key factor is a senior and influential Project Sponsor from the Parent Company who will drive the project and who is committed to the success of the Indian venture.
9. What are the typical costs for a captive ODC?
For a team size of 15 engineers the one time costs could be in the region of $32,000. The operating costs excluding payroll (as this is a function of the type of engineers hired) could be about $400 per month per engineer.