Question about outsourcing

letulechuga

Golden Member
Sep 28, 2004
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Hi AT,

I have recently became acquainted with a developer studio overseas who are looking to break into the U.S. market. What kind of companies do you think would be interested in outsourcing to them ?

As a team they provide full stack web dev services, application development and mobile development.

Thank you in advance for your help !
 

slugg

Diamond Member
Feb 17, 2002
4,722
73
91
Well... not a whole lot to go by.

Let start with some terminology. Offshoring is not outsourcing. If my American company doesn't want to implement something, I may outsource it to another American company. Basically, outsourcing just means that a company is contracting out a project, rather than doing it in-house.

Offshoring is not mutually exclusive to outsourcing. A big company may have domestic and offshore offices. But it is common for an American company to outsource to an offshore company, and I believe that's what you're asking about.

This may seem jaded, but this is the truth... Offshoring, 9 times out of 10, is just a race to the bottom. So you asked who would be interested; those who'd be interested are those who don't want to spend much money. Once someone else is cheaper, the client will move to the cheaper source.

The next thing that usually happens is an onslaught of technical debt and the inability to move forward. That's usually when the outsourcing stops and companies bring it back in house.

Then they determine it's too expensive to do it in house, so they outsource it. Then they realize it's cheaper to offshore it.

Rinse and repeat.

Hope this helps! Happy Memorial Day weekend! 'Murica!
 
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purbeast0

No Lifer
Sep 13, 2001
52,834
5,713
126
Yup, which is why the saying can never be truer in the software industry, in that you get what you pay for. There is a reason we have so many buggy ass software products out there, and a lot of it has to do with trying to cheap out on cost.

A rockstar senior engineer may cost you more than two times 2 average/mediocore developers, but in the end, that rockstar developer will do more for the software in 3 months than those 2 average developers will do for you in a year. Paying for talent in software is extremely worth it. It may cost you more up front, but the long run savings are where it will be extremely worth it.
 

jdstern

Junior Member
Dec 15, 2009
18
2
66
Sadly as the person that over the past 25 years in IT that provides support for both development and production applications and systems, I have seen what outsourcing produces.

A few of the big draw backs to outsourcing regardless of the quality of the developer/support is:

1. Lack of the business knowledge. Most outsource companies lack the particular knowledge of the business they work for. Overtime it can be acquired, but depending upon the complexity of the business that can take years. This assumes that the outsource keeps the same core people the entire time on that one customer account.

2. Lack of the business communication skills. Much is lost when you deal 90% of the time with emails and IM chats, its very hard to pick up the nuances that face to face communication can convey. I can not count the number of times contractors are ask if they understand the issue, and they reply they do, when they don't understand the issue, when the mean they heard you.

3. Cost of outsourcing. It is a huge hidden cost. In my 25 years of dealing with outsource contracts both as part of the support infrastructure and as a project manager of a large conversion project. While no project of a large scale will always be done perfectly (there are exceptions of course). I have been involve in probably 2 dozen over my career. Those done in house tend to have fewer long term costs (rewrite, training, support) then outsource. The reason is simple, they have a vest interest in doing it right.

Outsource contractors are strictly there for the money, the longer and more problematically it becomes the more money. If the project is not nixed early enough, most companies executives will be reluctant to cancel it for fear of repercussions (ie being fired), so will often pour more money and double down. It will take on a life of its own, until either the management changes or the company can no longer hide its screw up.

Now are there cases where outsourcing is a good idea, absolutely. If the companies projects are not in their skill wheelhouse, then a carefully managed project with onsite contractors are great options. If it's offshore, the contract with specific deliverables, penalties and periodic onsite meetings as part of the deal work well too.
 

beginner99

Diamond Member
Jun 2, 2009
5,208
1,580
136
Yup, which is why the saying can never be truer in the software industry, in that you get what you pay for. There is a reason we have so many buggy ass software products out there, and a lot of it has to do with trying to cheap out on cost.

Well this is true for going cheap. On the flip side paying a lot doesn't guarantee a good product especially not if you use IBM...

I'm currently in a project where we have external company developing for us. Just confirmed my opinion. It doesn't work. It's extremely inefficient and regardless what is said you are basically doing waterfall. They don't use common sense. Do the minimum. generally no great interest in delivering a good product. makes sense because if the don't deliver, you will need more of there time hence more money.

Developing with in-house devs is just much more efficient that it is actually cheaper in total. Less overhead and the devs actually have an interest to deliver something good because they are directly accountable. But bean-counters don't get this.
 

DaveSimmons

Elite Member
Aug 12, 2001
40,730
670
126
Now are there cases where outsourcing is a good idea, absolutely. If the companies projects are not in their skill wheelhouse, then a carefully managed project with onsite contractors are great options. If it's offshore, the contract with specific deliverables, penalties and periodic onsite meetings as part of the deal work well too.

We did this a decade ago over several years for creating some Flash content and some PHP coding for our company site. At the time we had no in-house PHP developers. It was offsite contract work rather than outsourcing existing jobs. We've also contracted out graphics design and UI design.

In general, I'd say if you have enough ongoing work to require a full-time position then you're better off doing it in-house. We now have our own cloud server developers and of course we no longer use Flash :)