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From San Jose to Boston in the United States and in many other countries as well, these scenes are played out every day. Many people know about the promise of outsourcing—lower costs and accelerated completion of programming projects and software products. And yet deciding to outsource is not an easy decision for many companies. Is outsourcing only for the foreign-born entrepreneurs and executives? In his book Crossing the Chasm, Geoffrey Moore introduces the concept of innovators and early adopters, who are the first to become involved with a new trend or product. When it comes to outsourcing, it seems that we have crossed the chasm from this first stage to encourage an early majority of people and companies that now find value in outsourcing. They believe that outsourcing of software development has been tried and tested by the early adopters and now is safe for them to try.
Or is it? Studies have shown that more than half of outsourced work fails to meet financial goals. So have all the problems, risks, and dangers really been eliminated? Is it safe for you to outsource your software development? Given the pressure to outsource, how can you decide whether outsourcing is even appropriate for your company?
This book will help you decide. I have faced these questions in deciding to outsource my own software development. In some cases I was told I had to outsource; in others I made the decision myself. Together we will explore the issues of outsourcing—when to do it, where to do it, and how to do it. Even when not to outsource.
In this book, you will discover practical solutions to the problems that arise when outsourcing. The overall goal is to make your outsourcing as risk-free as possible. Each chapter presents an outsourcing issue and shows how you can navigate past the shoals of other people’s mistakes to arrive at the end goal of delivering your software on time, within scope, and on budget. And that budget will be much, much lower when you use offshore outsourcing. Here is what you’ll find in each chapter:
Chapter 1: Deciding to Outsource. What factors should you consider in making your decision? When are the risks of outsourcing too great to bear? If you do decide to outsource, how should you do it? Should you contract with an offshore vendor or one in your home country? Or should you use more than one vendor?
Chapter 2: Where to Outsource. More than 80 percent of outsourcing is done in India. But is that the best place for you? Outsourcing to China is growing rapidly. Is that the right destination for your outsourcing? What about Eastern Europe or Latin America?
Chapter 3: How to Select Your Outsourcing Vendor. What criteria should you take into consideration when selecting your outsourcing vendor? Just having a personal referral to a vendor from a friend or relative is usually not enough. The vendor you choose should meet the business, technical, and time zone criteria that work well for your organization.
Chapter 4: Offshoring, or Creating Your Own Offshore Subsidiary. You can save even more money when you create an offshore subsidiary, because the salary you pay your offshore engineers is lower than the outsourcing rate. But what about the setup costs and management overhead? See if it would make sense for your company to use a partner to build, operate, and then transfer (BOT) your offshore engineering team into your own subsidiary later.
Chapter 5: Describing Your Software for Outsourcing. It is critical for you to have a specification for your software that explains what it should do. Yet you don’t need to spend months creating a huge document that rivals the size of War and Peace in order to direct your outsourcing effectively. This chapter describes how big your specification should be and what it should contain.
Chapter 6: Controlling Your Outsourced Software Development. Will your internal engineers be working from the same code base as your outsourced team? How will you handle integration if they are working separately? What are agile software development methods, and when should you be using them, whether you are outsourcing or not?
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