Looking Deeper At Offshoring

from the beyond-that-first-pass-analysis dept

It’s good to see more articles that go a little bit deeper than the knee-jerk reaction on the issue of offshoring. This article points out what we’ve been saying for a while: many companies are rushing too quickly to offshore work, which will cost them. There are many programming jobs where it helps to be located near customers or where cultural understanding is necessary. Plus, the logistics of offshoring make it much more expensive than it seems on a first pass. That said, however, there are some jobs that are going to be offshored, and that’s not a bad thing. The article points out that offshoring will actually help to open up new programming jobs in the US. By making certain aspects of software development cheaper, there should be more demand for the types of jobs that will require local programmers in the US. At the same time, the article makes the most important point: protectionist policies won’t make the programmers in India, China and Russia go away. All it does is make sure they’re not working for American companies, and making American companies less competitive on a global scale.

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Comments on “Looking Deeper At Offshoring”

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Anonymous Coward says:

My experience is 11 failures for 12 tries

I am a project manager and tech auditor. I have audited 9 offshoring projects. All were complete failures, resulting in bankruptcy for four companies.

Lack of experience, bloated code and theft were common. One project did the database design based on books published in 1979. Another outsourced used the project as a training ground for new programers, who once they proved competent were moved to the company’s competing product.

On a happier note, each of these companies has help finance the start-up of a competitor in India.

Didn’t we learn anything from the auto industry outsourcing to Japan?

OldYeller says:

Re: My experience is 11 failures for 12 tries

All valid points, but in my experiences with completely US-based projects (both on the vendor and customer side), I saw many of the same reasons above lead to project failures, some with losses running into the millions.

Overselling of abilities is pretty common no matter where you look, and anyone who’s worked in consulting has probably seen talent swapped out early in a project to help sell to the next customer, with second-stringers brought in to complete the work.

Anyone in the IT business period has also seen his/her share of in-house projects go bad, so citing failed offshore projects is not conclusive in and of itself.

Companies like GE with strong project management discipline are making offshoring work because of the discipline itself.

Bad scoping, definition, management and/or governance will kill a project every time, no matter who does the work.

Tired Of Explaining the Obvious says:

Re: My experience is 11 failures for 12 tries

The auto industry didn’t “outsource to Japan,” they simply failed to compete.

“When the American government went (more) protectionist against Japanese imports in the 1980s, Honda, along with other foreign manufacturers, built plants in the US. Today, a Honda Accord’s “domestic content” for us is 97%, which makes the Accord less of an import than the Ford F-150.

“The Marysville, Ohio plant that builds Accords is worth mentioning. Considered the most efficient auto plant in the world, it is where the Honda people bring young Japanese managers to show them how a plant should work. (Note that the Marysville workers decided to go nonunion when the plant opened.) Today, the Japanese continue to outstrip American automakers in auto quality, performance, and manufacturing efficiency.”


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