What if Outsourced Software Was Free?

Russell Roberts wrote an interesting article on outsourcing that is well worth the read. This was written back in February, but makes a great point:

…suppose Indians decided to work for free and give away the software, the ultimate competitive threat. If outsourcing work to low-wage Indians is bad, surely free software from zero-wage Indians is even worse.
Free software would be hard for the U.S. workers in the software industry to compete with. But it would be a boon for America—plenty of U.S. outfits would expand. Having free software would let a lot of new companies come into existence that couldn’t have been profitable before. Programs at no cost would mean lower prices across the board. That would liberate resources to do new things all over the economy. Many of those out-of-work American programmers would find new jobs. The same effect occurs when the software is merely cheaper, rather than free.

The macroeconomic view of things is different from the personal view, where someone is worried about their income, job, savings etc. The important thing is to position yourself correctly, because economic trends will always drive individuals.

Outsourcing Allows Companies to Focus on Critical Business Drivers

Another interesting article on outsourcing [Link removed, full story no longer available] from an ad agency in the UK.

They referenced CMM as an indication of offshore software quality in India, so it hit my radar screen. The article is about ad agency outsourcing, but this nugget of gold is in the middle of the article:

…outsourcing frees your agency to focus on core strategy, sales and marketing. Ideas, innovative products and services, knowledge of your customers needs: these are the real drivers of growth, so ideally you want to be spending as much time as possible on them.

Change a couple of words and the above could easily apply to a company developing software products offshore. That’s another example of someone that “gets it” on the topic of outsourcing.

Advanced Institute of Management Offshoring Brief

The Advanced Institute of Management (AIM) has released an interesting Briefing Note:

Offshoring of business services and its impact on the UK economy (PDF, 36 pages) [Link removed, full story no longer available].

This report is worth a look, the main conclusions are:

  • Business services provided 50% of the job growth in the UK over the last 20 years.
  • The UK has a trade surplus in business services (the UK sells more services to other countries than they “offshore”).
  • UK Business Services industries are experiencing continued job growth, job losses from outsourcing are small compared to total job creation in Business Services.
  • UK productivity in Business Services has increased (caught up with US, France, and Germany) along with employment growth.

One very interesting aspect of this brief is that it has a tone indicating the UK should use offshore resources to further increase competitiveness with other countries.

AIM gets it.

Offshore Outsourcing Software Development Project Management Research Survey

Do you have a major concern or challenge with your offshore software projects?

Would you like to get advice on how to overcome that challenge from other software professionals?

Do you have experience with offshore software projects that others could benefit from?
The Offshore Outsourcing Software Development Project Management Research Survey gathers information from software professionals on offshore outsourcing projects.
The goal is to identify the biggest concerns or challenges, and the best practices or advices from professionals involved with offshore outsource software development.
Those that complete the survey will receive the results by email, once enough responses are submitted and the data analysis and report is completed.
There are only seven questions, so it only takes a few minutes to complete the Offshore Outsource Software Development Project Management Research Survey.
Complete the survey now to get access to the research report.

Internet Entrepreneurs: The Ultimate Example of Leveling the Playing Field

The last point on my previous post was that offshore software development can level the playing field for smaller companies competing with larger companies. I got some feedback that this is truer than I thought.

Internet entrepreneurs are the ultimate example: a one person company can use offshore software development to build a web site that is as functional and looks as official as any major corporation’s site.

Offshore Outsourcing, Why You Need to Make it a Core Competency

This site is all about learning to succeed with offshore software development. You need to make learning to work with an offshore outsource development team one of your core competencies. Here are the top reasons why:

  • In today’s cost constrained environment, the primary way many companies are adding more human resources to software development is via offshore outsourcing. If you know how to work well with an offshore software development team, you will have access to more resources than others.
  • When the competitive landscape changes, failure to adapt is not good for your survival. Offshore outsourcing is a huge change that companies are not able to ignore, so neither can you.
  • There are many useful software projects that never get done for lack of resources. Some companies are getting these done via offshore outsourcing.
  • When work can be done at a lower price, it will be done that way, even when risk is involved. For example, are the guys that cut the grass in your neighborhood legal US residents? Are you sure?
  • If someone else can do what you’re doing cheaper, that’s a wake up call for you to go find higher value work. Software development is on a track to become a commodity skill set. Think about China, which graduates over three times as many engineersas the USA every year. What’s going to happen in a few more years?
  • You need to be on the right side of major industry trends like offshore outsourcing. Fighting against a strong trend with economic benefit behind it is futile.
  • If you don’t embrace offshore outsourcing, someone else will. It may be someone in your company, or someone at a competitor. The ultimate results are not good for you either way.
  • Offshore outsourcing levels the playing field for small companies that could not afford development of large, specialized software applications at US labor rates. This seems like a big opportunity.

Example of a Bad Attitude Towards Offshore Outsourcing

I recently received the following via e-mail in response to a link exchange request:

You really don’t believe that some of us would accept a link exchange that read like yours does, do you!!

My link exchange request was not terribly offensive, so it took me a minute to figure what was going on. Apparently this individual assumed I was one of those evil offshore people that are stealing jobs from “us.”

This is exactly the kind of thinking the USA needs to put aside as a nation. We can close our minds and close our borders, but that will hurt us as much or more than it hurts anyone else.

The Rough Guide to India

This is the travel guide to India recommended most by people that have made the trip.

There are several travel guides to India, what sets this one apart is the extensive reviews of hotels, restaurants, shops, and museums in just about every city.

While this book is targeted at the tourist instead of the business traveler, it does help you start to understand the people and culture of India. Besides, who is going to travel to an exotic place on the other side of the planet (for us Americans) and not check out a few unique and interesting attractions along the way?

The only caution is to be sure you get a new edition, as this book has been around for a while, be careful when buying used versions.

The Rough Guide to India (available on Amazon.com)