There’s More to Outsourcing than Just Cutting Costs

These days it’s standard practice for American based companies implementing software systems to send technical development overseas to countries like India, Singapore, and China. If you walk around the corner of your office, you may find a small offshore team crammed into a cubical gathering and reviewing technical requirements to be distributed to resources located on the other side of the world. In almost all cases, the outsourcing model is adopted in an effort to cut down on development costs. On the surface it makes sense – why pay a US based contractor the high salary when an offshore resource can perform the same work for a fraction of the cost? Several years ago, many IT executives considered this question to be a no-brainer and would have immediately adopted the offshore model. But while all their concentration was focused on cutting costs, project managers neglected other important variables in the offshore equation, and as a result there have been few successes and far too many failures in adopting the outsourcing model within the IT industry. If you’re an executive evaluating the cost benefits of the offshore model, there are other factors to take into consideration.

Continue Reading 4 comments January 21st, 2008