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The business case for NOT outsourcing software development

By newtc ·
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Is anyone frustrated with the continuing theme of outsourcing that encourages American companies to outsource to foreign software development companies? (c.f. the recent white paper on TechRepublic: Offshore Software Test Automation: A Strategic Approach to Cost and Speed Effectiveness.)

I?m interested in hearing reasons why companies should keep their IT and software development ?onshore.? Any ideas?

TIA, Newt

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by newtc In reply to My humble point of view.. ...

Mike, what about the offshore component of this question. Not just outsourcing, but offshore outsourcing?

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to get what you want...

by dsm In reply to The business case for NOT ...

... you have to be able to write a spec that works. Spec writing for offshore development, rather the lack of quality in that task, has caused considerable re-work, gnashing of teeth, loss of promising career prospects, and so on. Leaving yourself at the mercy of interpretation in overseas "code factories" is not just naive, it is a real money-waster. It is not that the offshore groups cannot deliver what we want, but that getting it to look and feel like what you sold to the business users requires serious technical and user-interface specification that has been found wanting, let us say.

The result has been a product that has had to be re-worked and results in, generally, wasted money and time.

One of the other causes has been the lack of drive or inability to manage the process remotely. No matter how many early morning or late night video conferences you have, there is nothing like sharing the view of what is going on and having users walk through the intermediate products as they have developed the interface.

It is management that is often lacking and left to the architects, my experience is that the delivered product will generally NOT fit the dimensions of the solution that was sold. However, as noted, this is a management issue, not a technical one, per se, and IT management is often more short on the ground than spec writing ability. But that is just my experience. What do I know?

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Source code security

by terry_157 In reply to The business case for NOT ...

We believe the risk to offshore to India, Russia, China is too great of a risk to have our IP - Source copied, stolen, modified in a way that we do not desire. And, that is on the commercial side.

We also are U.S. Govt. contractors. As such why risk undermining the code's security and have a country like China, who last year attacked DoD components over 300 times last year acquire it. They are organized military hackers.

Why would we want to save a few bucks offshore when I can go to several states within the U.S., Homesource and get as good if not better quality work and still save $ without the worries?

I can do background checks on U.S. Citizens!

We also don't want the logistics issues.

We prefer to help the U.S. ecomony not undermine it.


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by IT cowgirl In reply to Source code security

You are right on the money! I mean security. Or do I?

With the onset of the Sarbanes-Oxley and all other government regulations (both State and Federal) security is a BIG issue. Also, in the light of terrorist activity world-wide, why would anyone in the US send their programming jobs to another country? Does anyone else in the US not see the absolute absurdity of this practice?
If I am required to protect "secrets" and devise "impenetrable" security for my government entity or my company, how do I possibly meet this requirement by sending the job to another country to perform the task? Is it logical that virtually every bank, insurance, retirement fund, and state governments are having programmers from all over the world write the code to secure this information because they company can pay these poeple less money? Now these other countries have the code to penatrate virtually every piece of critical information in the US. Or worse yet, sell it at a high price to those willing to pay the highest price to deafeat the US through its money flow!

I know, lets make them sign an agreement not to tell or sell! Of course, sfter someone has breached your security, secrets, and money holdings; you will have no resources to pursue your programmers' breach of contract for the next 50 years! Yet the terrorists will have your security, secrets, and money holdings.

How can I possibly protect my company's (country's) assets, client and comany information, and secure my company/country by sending those jobs (which program my protection) to another country? A lesser example of this issue is already being fought against test sites which "magically" obtain the answers to certification tests for Microsoft, Ciscso, et. al. The information is easily obtainable and they cannot really do anything about it to those in another country. Luckily Microsoft and Cisco do not really loose money because more people take their tests because they can easily pass them with the answers. But can your company or county survive if your security, information, and/or assets have been breached?

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Dealing With a Fad

by The-Jetman In reply to The business case for NOT ...

While the entire idea of off-shoring IS NOT a fad, it's a popular idea that far too many don't understand and decision makers jump on the bandwagon bec they truly want to more cost-efficient. So, many make the leap and get burned bec they "think" they understand the constraints/considerations/issues from the success stories.

In my own experience, several years ago I was living in a little town in Long Island, NY and had been doing good consulting work for a local small Web-based firm. Thay made many moves to grow, including a merger w/ another small company that hit the VC lottery, during the height of dot-com bubble. Well, the VC money dried up quickly and my client had to extract himself from the merger and re-gen his pre-existing Web biz.

Eventually, I was hired to "run" things on the IT side, as opposed to being a pure consultant. At that time, I'd been an IT pro for twenty years, so I was thunderstruck one day when I discovered my boss (the owner) had off-shored *all* web development to Russia and I hadn't heard *anything* about it ! NOT ONE WORD ! He and his mgrs, none of whom had *any* IT experience/training *decided* this idea made sense ! Admittedly, the volume of work necessitated addl bodies (pos from overseas), NO WAY were they qualified to negotiate this type of deal w/o an IT pro at the table. But, they did and eventually paid the ultimate price (out of biz.)

This was an isolated case, but still IMO symbolic of a certain kind of mindset in American mgmt, in small *and* large corporations. Mgrs/execs can make *any* decision they see fit in the IT arena, w/o any input from IT pros, bec too often we're marginalized by prejudice. Obviously, we're going to try and preserve our jobs, but that doesn't mean we're *always* incapable of making important business decisions or that we can't sit at the table when those decisions are made.

Offshoring is a fact of life, in all domains, including IT. But it's a rare organization that can make it pay off in the short-term. *That's* why I see this as a kind of fad, bec I believe mgrs/execs don't realize they're trading one set of probs for a new set of equally challenging issues. Offshoring introduces brand-new classes of people/communcations/tech issues and line mgrs/execs are no more prepared for these, than they are for the home-grown ones.

*Nobody* is going to solve your problems for you, at least not at a price that you (the mgr/exec) decide alone.

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If there is constant software development in your company, for internal use, intellectual property is a good reason to not outsource
I think.

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In essence it's very simple

by Tony Hopkinson In reply to The business case for NOT ...

If you outsource coding, ie implementation, you are effectively having to go back to the way back when model. Where all eyes were dotted and all tees were crossed before anyone wrote a line of code.

Never worked in the past (well ok may be twice in really extreme environments), when the coders only spoke geek. As far as I'm aware Hindi and Mandarin chinese aren't going to make coders any more understandable to business heads.

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by gdelt In reply to The business case for NOT ...


try project management (software or not),
it's pretty good.

At the same time you stay is software or change to any other kind of PM.

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