Are You Outsourcing Software Development for Cost Savings? Watch Out!

Visitors: 219

Many companies choose outsourcing and offshoring of their software development to cut their costs. Although there is nothing wrong with the idea, it is rarely executed correctly to realize the expected results.

After listening to well-delivered sales spiels, some managers tend to look at the offshore costs and come to some interesting conclusions. “Hmmm! I could have four software developers for the cost of one”“ or even ““Cheaper, better and faster!”

All true, however, this gain is not fully realizable as there are several costly and time-consuming obstacles that need to be overcome. For a small flavor, here are a few examples -

1. Ramp-up time or knowledge transfer time – it often takes projects weeks or even months to be able to teach a newcomer the details of a system.

2. Management and the offshoring overhead – outsourcing often needs an intermediate level of management or coordination that may not have been required in your classic organization.

3. Proximity – there is an overhead that is generated when teams are not working face to face.

4. Time zones – working with people in different time zones can add on a set of constraints to a working environment. The time window for collaboration is often very small and simple issues might require multiple days to resolve.

5. Travel costs – travel to and from the offshore location can be both costly and very time consuming.

6. Process changes – Bridging the process gap between organizations is not a trivial task. Outsourcing is process intensive by nature.

7. Cultural changes – often seen as a minor adaptation; nevertheless, requires time to be able to work with another culture.

Outsourcing should be seen as a strategic long-term investment; where the investment period itself could span several years. Then, it could be several years before the investment on outsourcing actually starts to pay off.

Offshoring for the short-term gain could end up costing more than conventional in-house development. Those who choose outsourcing need to have a clear strategic plan. My book “IT, Software and Services: Outsourcing and Offshoring” is aimed at helping you develop a tailored strategic plan for your organization.

Robin Sood is the author of the book titled “IT, Software and Services: Outsourcing and Offshoring".

Robin has been involved in contract management and outsourcing for more than fourteen years. Robin holds Master's degrees in geology and software systems and has attended business courses at the Wharton School of Management.

IT, Software and Services: Outsourcing and Offshoring by Robin Sood. Original trade paperback, ISBN 0-9760674-3-9, published by AiAiYo Books, LLC. (877) 742-6657.

Jack Brown, jack.
AiAiYo Books LLC


Article Source:

Rate this Article:
Software Outsourcing - Reduce Work Load and Get Cost-Efficient Help
Rated 4 / 5
based on 5 votes

Related Articles:

Software Development And Web Development Outsourcing

by: Daya Mukherjee(January 05, 2012)
(Computers and Technology/Software)

Outsourcing Software Development A Way to Custom Software Solutions

by: Cathy Brown(July 08, 2008)

Outsourcing Software Development

by: Jeff R Smith(July 23, 2008)
(Computers and Technology/Software)

Outsourcing your Software Development

by: Gary Preston(May 10, 2006)

A Recipe For Outsourcing Your Software Development

by: Steve Mezak(August 12, 2005)

The role of software development outsourcing in business

by: Kristen Stewart(September 14, 2010)

Software Development, Outsourcing and Consultancy For UK Market

by: Mridu Sinha(June 26, 2008)
(Computers and Technology/Software)

Measures to be given in outsourcing a Software Development Company

by: Shahid Ini(January 23, 2012)
(Computers and Technology/Software)

Offshore Dedicated Center - Cost-Effective Model for Web Development Outsourcing

by: Peter Melnikov(November 19, 2005)

Software Outsourcing - Reduce Work Load and Get Cost-Efficient Help

by: Allies Harbor(September 13, 2008)