Outsourcing Software Engineering 60 to 1 (Part 2 of N)

Posted: March 7th, 2010 | Author: Julio Hernandez-Miyares | Filed under: Technology, Technology Outsourcing |

I was communicating with an ex Software Engineer report of mine the other day asking how things were going in my old company. Without going into much detail about extraneous things, he volunteered that “most of the work was moving to India” , that he and the rest of the team stateside didn’t have much individual responsibility or work to do but that they were spending most of the time hand-holding the people they were collaborating with in India. He used the ratio 60 to 1 (60 hours to do what he could do in one hour).
That ratio in my estimation is a wild exaggeration but it is not totally off in certain respects.

The biggest problem in my experience with productivity of software engineering outsourced to India is in the realm of managing towards overall effectiveness not solely the metric of cost. Of course, outsourcing a high wage activity such as software engineering to a much lower wage rate location will reduce gross engineering costs at least in the short-term. Accomplishing that is as deterministic as anything within the raft of different resourcing options any company has at it’s disposal.
If that metric is the sole determinant of success, the company following this approach will be measuring success or failure on a metric that anyone with a calculator or the most basic business sense can appear to succeed at.

The true measure should be similar to how employee investment Rate of Return is determined stateside or anywhere else in the world. What am I getting in terms of value for my investment? And since in this particular case I am talking about the Web business, how is the time to market impacted in outsourcing these critical activities to bring goods to market?
Software Development is an esoteric craft or at least treated that way by many folks who have decision making or sign off authority for outsourcing this important function. The cost in time and opportunity lost by the Stateside developers having to support in numerous ways

• providing business context
• providing elaboration usually nuanced on product requirements
• reviewing for standard implementations

the effort from India as well as trying to do their job is rarely a point of consideration.

From the aforemetioned one would assume I am against outsourcing to India. The fact is I am not, I have had success with it (and some quite bumpy rides as well) and if done for the right reasons

• abundant supply of of young Software Engineers
• a timezone that coupled with Timezones within the USA can result in a follow the sun iteration (this is not for the faint of heart. It is easier said then done)
• Better context of what works in the India or Asia Pacific Rim if the product is being tailored for that market
• And of course, a positive cost benefit for your efforts

A criterion for Success is to make the India team especially it’s India based management strictly accountable for the efforts of the India based Development staff. That may seem obvious and it is but usually for reasons of expediency a Program manager or a stateside liaison is the point of contact obscuring the true accountable parties for success of an India Development center.

To be continued….

Outsourcing Software Development Part One

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