Offshorings Achilles Heel, NOT!


I do like the odd hyperbole, but not when the same is couched in what appears to be marketing tosh. I came across some interesting comments in a recent blog by Scott Francis, which if (a very big if) true would signal the demise of outsourced offshoring as we know it. To paraphrase a quote from the blog (originally from Sandy Kemsleys blog reporting on the PegaWorld conference) it tells us that AmEx has decided to move away from the waterfall to small teams and agile method, which is of course good for AmEx. Sandy Kemsley also reports Gerald Chertavian of Year Up, again paraphrasing, AmEx has requested their help to “… help them with re-onshoring their development team.” All this is harmless, but Kemsley further reports that according to Gerald Chertavian, “This is a pretty negative commentary on the effectiveness of outsourced offshore development teams for agile and continuous delivery, which is considered essential for todays market.”

I have nothing against AmEx wanting to on-shore its development team, good luck to them. It is the suggestion that “… this is a pretty negative commentary on the effectiveness of outsourced offshore development teams for agile and continuous delivery,” that gets my goat. Many things have changed since twenty-five years ago and the follow-on growth of the outsourced offshoring industry. One of the most important change (in the offshoring service providers country, specifically India) is the growing awareness among the new generation of technology newbies to want to create IP for themselves. This is a very nascent environment, but also the place were you find real usage of bleeding edge technologies, be it the latest JS framework, or the exploitation cloud native technologies/techniques. This is not book knowledge, but knowledge obtained via experimentation and implementation in the problem and solution space.

Cost reduction was what gave the impetus to rapid growth in outsourced offshoring for software development. But, the continuation of the cost reduction mindset would have us believe that the cost differential of twenty-five odd years ago has not altered, thus leaving bargaining potential unaltered. New technology resources are assumed to always cost less in an offshoring environment, while at the same time it is an acceptable logic that high demand and low supply is driving the high prices in the onshoring country.

Whether it is business process or any other domain of interest, do not outsource because you believe you will be looking at excessive cost saving. If this is the only criteria then you will find yourself with a questionable quality of resources, and other ancillary service offerings. This is particularly true if your interests lie in the latest technologies, techniques, development, or deployment environments.

Although, not true for all, the motive forces to outsourced offshoring should also include the extended period of development available due to time zone differences, in particular with the need get to market fast. But, this also needs more inclusive development environment, just saying you are doing distributed agile development is just not going to be good enough. In particular when it comes to continuous delivery how the teams play together is of paramount importance. If the offshore team is not included in some of the decision making, the consequences for development, automated testing (with an up to date suite of tests), and deployment can turn catastrophic very quickly. Whether it is BPM development or any other domain of development trust is critical. Know what you expect from your resources. The hires should be flexible, but also bounded in some sense. Fast track team building is not always the ideal, slowly but surely growing a team is by far better. Providing professional tools to the team is more important then insisting on open source with inadequate support; this will increase the learning curve.

There are many reasons for failure of outsourced offshoring, it is wrong to put all the blame on only one side, no matter the motive. If re-onshoring is the fashion of the moment, one should also note that organisations don’t stand still, they change their business models to realign to the market changes. Most large and medium offshore service providers are also creating onshoring provisions via offices located in the country of need. What will happen to the resource cost as the competition for the limited numbers increases beyond the capacity, dare we make a guess?

About KM Mukku

Kick-start, build and manage teams in product development (particularly in the financial domain), and enjoy all in adaptive case management, business process design and business process improvement. Currently holding the position of CTO at coMakeIT.
This entry was posted in business process, outsourcing/offshoring, software development. Bookmark the permalink.

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