jeela.com
beyond web 2.0

Outsourcing 2.0

  I have used ‘offshore’ resources for many projects in the past and can honestly say there are some pros and cons. The touted benefits of saving a lot of money by replacing a permanent FTE (Full Time Employee) with an offshore resource have to be carefully considered. My experience has been that a project can really benefit from Designing and Specifying a project or feature and then handing off the development work to an offshore team and manager. The team and an on site point of contact should routinely communicate and share progress (Normal project management stuff). I have seen though that the teams I have dealt with had a high turnover rate and that to mitigate this risk the domain expertise should kept in house as turnover in the states is a lot lower.

If you consider the cost savings of a FTE vs. and offshore developer you are immediately drawn to the concept. But consider that the offshore team will require more oversight than an internal team simply because of the distance. Also take into account the time difference between teams and the impact it will have on the resources that will interface with them. And finally, make sure you account for equipping the offshore teams with specific software that you may need for the project as this is typically not covered contractually. Many firms have researched the actual savings of using offshore resources and the numbers I have read mention between 10-20%, personally I have calculated a 35% savings based on my experiences.

A few references below with some good points:
 eweek.com

birnbaumassociates.com

silicon.com 

sourcingmag.com 

My experience overall has been positive to the concept of offshore programming but only if used in the correct fashion. There are many large companies in India, Ireland, South America and Europe that specialize in IT related contract services and only too happy to talk to you.

If your a small company and only need a few hours of consulting time don’t forget about rentacoder.com, sologig.com and posting on craigslist.com, all good sources for local and distant programming help.