February 13, 2006 10:43 AM PST
Software vendors face rising offshore costs
- Related Stories
-
Can offshore outsourcers end reign of Big Six?
January 12, 2006 -
India faces offshore IT skills crisis by 2010
December 14, 2005
Consulting company
With that reliance comes risk and even some disillusionment, Rangaswami said.
He said many software companies expected massively lower costs by hiring offshore developers. However, those companies found that prices were about 40 percent lower when all factors were included.
"Most people were satisified. It's just that they thought it'd be a nirvana," Rangaswami said.
Offshore companies are already reacting to
India maintains an advantage over other offshore locations such as China, in large part because Indians' proficiency with English, he said.
Overall, the movement toward offshoring is forcing software companies to improve their processes for managing distributed teams, Rangaswami said. Typically, Silicon Valley software companies had a single team clustered in a single location and have not been good at distributed programming.
Rangaswami said that because most software companies use offshore development, they will need to more closely integrate their distributed development groups to stand apart from competitors.
"You can't treat this as a cost issue, which is what most people did initially," he said. "It was us and them. Now you have to look at it as one team with one goal and one set of metrics."
See more CNET content tagged:
offshore,
software company,
India,
IBM Corp.
Add that to the reports that some offshore employees are supplimenting their salaries with the sale of the confidential data they are processing, etc. and the cost of doing business beyond the reach of U.S. courts is even less of a bargain.
Looks like Gordon Gekko ("Greed is good") was wrong.
It is not just about India and US or India and UK?..it is about linking developers in the US with those in India, and China, Russia and wherever else they reside.
- Mohan
Author: Offshoring IT Services (http://www.offshoringmanagement.com/theBook.htm)
I cannot disagree more with this statement. Others may have had a different experience, but every single project I have worked on with outsource developers from India ended up over budget and late. The major cause has been primarily due to horrible communications. It's one thing to say that both parties can "speak" English, but the reality is that thick accents on both sides hinders efficiency. How much time was wasted by asking the other developer to repeat themselves due to incoherent accents? Too much in my humble opinion. How much time was wasted by not *understanding* industry standard terms? Too much. I've seen too many good people lose their jobs to the latest COO/CEO "Buzzword" craze. Their move to "reduce costs" are for the most part costing more in productivity and man-hours.
In my opinion, the government should give tax breaks to those corporations keeping jobs here instead of giving tax breaks for overseas outsourcing. Failure to keep our own citizens employed will only cause our country to crumble.