Ask Dr. G.
Technology changes too quickly and capriciously to expect anyone to stay current on all topics. It was just a few years ago multitiered system design was cutting edge. Now, we all are embroiled in Web services, and three tier sounds as old as VAX. So, the premise for this column is you send your tough questions to Dr. Gigabyte, and he will provide a meaningful response in time for the next executive committee meeting.
A word of warning: Dr. G. responds to questions only. One e-mail Dr. G. received this month consisted of a single line of text with an embedded link. To wit: Hey, im jenny please check out my Webcam its free! (Dr. G. really did receive this e-mail.) Even ignoring the most obvious problems with the contraction, the capitalization, and the run-on sentence, this obviously is not a question. If Jenny would care to resubmit her e-mail in the form of a question, Dr. G. will take appropriate action.
Dear Dr. G.: Am I going crazy or what? We are two months into a 24-month contract with an IT shop that is doing all of our Web development in a Third World country. It took me two years to sell my CFO on this deal. Today, I picked up a technology magazine and saw a headline that said, Reverse Offshoring Latest Outsourcing Trend. What gives? Did I make a bad decision?
Losing my credibility in L.A.
Dear Loser Losing:
You asked two questions. Yes, there is a very good chance you are going crazy. That would explain why you asked two questions when only one was required. Dr. G. is aware that crazy probably is not a politically correct description of your condition. I am sure you suffer from adult attention deficit disorder, and if we can pump you full of methylphenidate, you will be fine.
Now, we need to discuss whether you made a bad decision when you decided to outsource your Web development. By 2008, the U.S. will have outsourced an estimated 500,000 jobs at a cost of $142 billion. By any standard, that means you have a lot of company in the offshore world. Whether its a good idea or not remains to be seen.
I am reminded of a recent encounter I had with some offshore IT folks. We were enjoying a demonstration of a very expensive product by a vendors certified solution provider. We were planning to invest substantial resources in a project if the solution provider could demonstrate how the product integrated with another product from the same vendor. The visitors in our conference room apparently didnt have the skill set to demonstrate the products properly, so they hooked us up with another group via a teleconference and WebEx. We live and work in a virtual world, so what difference does it make if the developers who were demonstrating the product were 11 time zones away? Theoretically, none. But in reality, we were worlds apart. We demanded certain functionality be displayed that would show the interoperability of the two products. Yet no matter how many times we made the request, the offshore guys never understood what we wanted to see. They may have been excellent coders, but they could not grasp the business reasons or context in which we needed to see the product. The fact we all were speaking English was totally irrelevant because we were not communicating.
There is no doubt you can hire developers and system architects overseas for less money than in North America. But with that decrease in expense, there is a correspondent decrease in the value proposition. One of the benefits of in-house developers is they understand your business model so that when a proj-ect comes their way, they are able to understand the reason for and the value of that project. If your development needs are such they can be defined completely in a functional specifications document, then it may make sense to find an offshore development shop to crank out the code. The problem is few projects ever can be defined totally in advance. Most projects require a constant dialogue between the business unit and development team. This is difficult to do with a team 5,000 miles and a half day away.
Developer salaries have stabilized, and skill levels have increased (less demand allows us to hire only truly qualified people). Unless you are creating software, it may not make sense to offshore. Corporate development projects probably are too important to give up full control. Offshore rates are increasing. QA and communication are difficult to manage. Dr. G. says look long and hard at all the repercussions before opting for the cheapest solution.
If you have a question for Dr. G., please send via e-mail to gigabyte@tdmag.com. One question at a time pleaseand Jenny, I am waiting for your question.
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