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Offshore IT developments - Pros & Cons?

Do you outsource IT developments abroad? If so, why, and what are the conditions of success you believe apply to your case?

6 Replies

Keegan Beljanski
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Keegan Beljanski Entrepreneur • Advisor
Community and Marketing Intern at FounderDating
Here's a couple of pretty good discussions that have already taken place on this specific topic for starters

http://members.founderdating.com/discuss/Experience-with-Outsourcing-Development-Work
http://members.founderdating.com/discuss/Outsourced-Development

This also has a list of every discussion that has been started with the tag"Outsourcing"
http://members.founderdating.com/discuss/topic/10
Frederic Moreau
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Frederic Moreau Advisor
Agile Business Transformer
Thanks Keegan. I'll change the description and try to come with a summary of the previous discussions.
Ajit Gupta
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Ajit Gupta Entrepreneur
Entrepreneur
Hi frederic, I have outsourced mine and provided you are clear with regard to what you want and you take regular checkpoints it is great. You need to stay on top of them though. Average cost of an experienced developer is about 40usd per day. If you need any help please let me know. Ajit Sent from my Samsung Galaxy smartphone.
Steve Ciske
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Steve Ciske Entrepreneur
Technology Leader
I think it depends on what you are trying to accomplish and how mature your requirements and or vision is. Sometimes the speed and dependability of communication out weighs costs. Sometimes it doesn't.
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Entrepreneur
I've analyzed ecommerce development quotes and they look cheap up front, but digging deeper into work standards, found that the cost would be the same as working with devs. in the U.S.
Ajit Gupta
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Ajit Gupta Entrepreneur
Entrepreneur

I have been doing a lot of work on this as I had a couple of ideas I wanted to prototype (I do have an IT background). In the end I recruited my own team in India - cost if very low so even if they aren't as efficient as I would like compared to the UK there is a huge saving (magnitude of 10x). If you want to explore this option let me know, I'd be glad to try and help.

Frederic Moreau
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Frederic Moreau Advisor
Agile Business Transformer
Thanks @Steve, @Jonathan and @Ajit for your comments.
Based on your comments and the ones found in previous conversations, I'll try to summarize it this way:

o Outsource Vs Offshore
It seems that outsourcing is a project-based approach while offshoring relates to having a dedicated team taking further responsibilities on the software development and growth, providing more buy in and commitment from the team in the long run.
I'll use the term outsource here after for both meanings to keep it simple.

o What do people outsource?
- programming
- product management
- high end QA

o Reasons tooutsource IT developments?
- lower cost is the most common reason, especially to build an MVP for a startup
- time difference can be an asset (they produce while you sleep, then you revise when they sleep)
- highly skilled engineers at a lower cost

o Results
it seems that outsourcing leads to either successes and failures. But when the client is an engineer, or at least has IT development skills, chances of success are greater.

o Conditions of success
- send the entire project offshore, with the product manager
- if you are not an engineer, you need to have a CTO to do the interface, or find an IT firm who can do the interface for you

o Issues to look after:
- intellectual property
- language & cultural differences

So this leads to another question... which direction is this going to take?

If we consider that the demand for IT engineers is increasing pretty much every where in the western world, and elsewhere I presume... and the number of new engineers arriving on the market annually, is the demand going to exceed the supply, thus obliging us to outsource even more to remote locations like India, Costa Rica or Ukraine?

Which scenarios can we do?

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