BossTalks.com Tag: outsource

white on "Does outsourcing really help?"

white — Fri, 06 Apr 2007 10:46:25 +0000

There is a nice topic raised up on one of the forums devoted to business in IT. Does the outsourcing really help? Does it cut the costs? Or does it end up in spending more money, or, what's more valuable, more time?

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white on "Micromanagement issues with offshore teams"

white — Thu, 15 Mar 2007 21:47:39 +0000

Well, while the most of progressive companies are trying to move in to team leader style by placing people in the team as equals, but allowing someone (usually more experienced and mature person) to make a decision on rising concerns; some companies still try to incorporate hierarchial leadership, army-style slave-to-boss relationship, which eventually leads (to my opinion) to micromanagement issue. What is micromanagement? In simply words, it is when you try to keep an eye and manage every single mouse click and key press of every person in your team (your company, your country). I am sure, this is not always a question of company policy, but a decision made by some circumstances. What kind of circumstances?

Just a short example. For example, first time offshore experience is often painfull, especially for a competely local company that never worked to anyone else even out of the state. However, at some time point, company believes that they need to outsource and they hire offshore people. As the first aid step, the managers and heads are trying to put an extra security on the job to be sure that the process is running to the right way. Managers try to keep an eye on every step, being scared to give offshore peple an extra freedom. As far as this is impossible to do for a person, who is not on the same experience level as the offshore geeks (who are actually supposed to be very smart), company sends their best local geek to lead the offshore process. Local geek understands the process, but unlikely he is not good to make orders (he is a regular hi-tech geek and never taught to be a manager), and after numerous tries and falls, he finds himself writing the code, which he can't order. At this moment the time of micromanagement comes. The company made busy all local people with the same task as offshore people (remember, local geeks control the offshore geeks), as the result it pays double check for the same task, financials cry and the company rips off the whole idea of outsourcing development. Nice scenario?

So how often does it happen in offshore world and how do you fight with the companies when you see theirs micromanagement behaviours, or they build a boss hierarchy on you?

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peet on "At what rate would you consider outsourcing?"

peet — Thu, 15 Mar 2007 07:46:19 +0000

Your problem is that you trying to sell right now and you are trying to put your expenses on the shoulders of your clients. This is not a good way of either negotiating or price building model. But no one here, in US, cares about your problems (I guess you are in Russia or somewhere around). We have got plenty of local people with no language barrier and recent equipment and no Internet problems. Keeping in mind that offshore people often screws up on paying taxes, while local people are not. My point is that I'll think about paying each person independently and the salaries over here would influence me in the latest order. I will never propose more then 10% of the local offshore salary to any remote worker. I mean, if the people in Russia get $1 grand monthly for doing PHP development, I would never give them more then $1,100 from the very beginning ($1,000 + 10%) even if here in US, I will have to pay $5 grands for the same kind of a guy (disclaimer: this is not an actual numbers, just an example). I will definitely increase his salary if he'll prove himself to be really good for me, but this is the part of other science. And I never could understand why a lot of offshore teams try to do pricing looking at US prices, but not making of a real cost.

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krivitsky on "At what rate would you consider outsourcing?"

krivitsky — Thu, 15 Mar 2007 04:51:51 +0000

there are tons of hidden expenses in offshore development - it is not only about salaries, sadly

they might need:
- tools that support your remote process
- IT infrastructure to enable remote communication (hardware, internet bandwidth, telephony...)
- working environment that matches *your* standards
- ...

also note that the lower are the salaries, the faster they tend to grow.
and also your project speed (velocity) will slow down had you been developing it with local teams before which will delay the ROI and increase your project expenses

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white on "At what rate would you consider outsourcing?"

white — Sat, 03 Mar 2007 21:49:14 +0000

What is rate difference at what you would consider outsourcing your development overseas? I.e., if the salary of full-time Java developer is $84,000 annually, or $7,000 per month, would you consider hiring a Java developer overseas for 70% of local employee ($4,900 per month) or you would consider not more then 30% ($2,100 per month) ?

What are the numbers which warm you up to think about it?

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