When NOT to Outsource
 
When NOT to Outsource

The trend toward offshoring software development in businesses has given IT management and senior executive management of any company a new avenue to get large scale software projects accomplished without swelling the ranks of their internal IT departments. While there are some compelling arguments for offshoring, the decision about whether taking this step is cost justified needs to be put under the same cold scrutiny that any business decision must endure before it goes from concept to reality.

The question of whether offshoring development to contractors is a good move from a cost benefit analyses can return mixed results. The use of consultants and contractors is almost always on the surface more expensive than using staff developers to do the same job. Highly trained technical consultants will change anywhere from $100 to $250 and hour which is far higher than what you pay even for well trained technical IT programmers and project developers on staff. So if you determine that the project will take 1000 hours to complete and do a simple spreadsheet comparison using only hourly rate to go by, the offshoring decision will lose every time.

But a simple rate to rate comparison is too shallow to really be a good evaluation of whether going with an offshoring solution is economical and a smart business move. For one thing, the company you hire to bring a solution may already have a commercial software package or a software solution they developed for another client that can be used as the base for your development. This not only saves money because much of the development has been done but it lets you start with working software so the project changes from a new development effort to one of modifying an existing product to customize it for your company.

However, there is a case for introducing some level of skepticism about the idea of offshoring in light of the ambitions of consulting agencies themselves. If an external software firm comes in with a very convincing presentation about the value of going with a package answer to your software need or offshoring that development, it's a good idea to review that presentation without the "sales overhead" that was present when they were on site. To be blunt, software contractors are very good sales people and the viability of the software package or the proposed solution must be exposed to the most rigorous technical review possible before important financial resources are cut lose to turn over the solution to the contractor.

This is where a thorough and technically detailed project proposal is crucial and must be demanded of any contracting company before the decision is made about whether to turn the job over to an outside agency. Complex software solutions should be reviewed by the people within your IT department who understand the technology and the development methods being proposed. Your own IT department will look at the proposal in depth and with the interests of the company at heart and if the proposal is technically weak, they will find it.

The contracting company proposing the project should be open and patient to answer all questions and perceived flaws in the system design they present and come back with revisions to that design as often as necessary. Only when they have proven beyond any doubt to the technical gurus in IT that the solution is viable and the design will work should the contract be considered from a financial point of view.

These kinds of reviews, while rigorous also surface something else important about the contracting company. If they are transparent and willing to work with you 100% at this stage, that bodes will for an open and honest development relationship which will yield a quality product that is bug free. But if the sales people who are putting the "dog and pony show" on about their software solution are not willing to undergo in depth technical scrutiny, then it might be a time to NOT offshore, or at least not to do so with that particular agent.



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Articles
Appropriate or Inappropriate Offshoring

Backing Into the Project Plan

Cyber Programmers

Finding the Right Offshore Software Developer

Help Staying Cutting Edge

How to Make a Mess of Offshoring

It's All in the Offshoring Contract

Know Your Contractor Inside Out

Living up to the Contract

Make Your Contractors Work for You

Making Sure Your Outsourced Project is on Track

Managing a Diverse Team

Minding the Store

Offshoring Testing

Offshoring Out of the Country

On Sending Your IT Work to India

Protecting Yourself in an Offshoring Situation

Selling Management on Software Development Offshoring

Taking the Teeth Out of Offshoring

Taking Your Web Development Elsewhere

The Contractor's Attitude

When NOT to Outsource

When the Contractors Leave

Who Can- Give You Great SEO?

Why Not Let Writers do Your Technical Writing?

 

Disclaimer: The Publisher has strived to be as accurate and complete as possible in the creation of this website, notwithstanding the fact that he does not warrant or represent at any time that the contents within are accurate due to the rapidly changing nature of the Internet.

This site is a common sense guide to When NOT to Outsource. In practical advice websites, like anything else in life, there are no guarantees of income made. Readers are cautioned to reply on their own judgment about their individual circumstances to act accordingly.

This site is not intended for use as a source of legal, business, accounting or financial advice. All readers are advised to seek services of competent professionals in legal, business, accounting, and finance field.

Any perceived slights of specific people or organizations are unintentional.

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