On Tue, 2004-11-09 at 08:55, Stede Troisi wrote:
> Without a union (and maybe even with) our fictious
> company could NEVER, EVER compete with WIPRO and other
> firms from India that can do the same things for
> 1/10th the price.
The only reliable numbers I've seen on this were from a company who
tried outsourcing a percentage of development work to India. Their
conclusion was that it really cost about 50% as much to get equivalent
quality. But this was in a pretty un-agile shop. They could have more
easily saved the money by reducing the waste in their existing process.
Further, as others have pointed out, XP shops provide advantages that
outsourcers cannot match. The obvious one is agility, but there are
others. One of the side effects of building software is the creation of
knowledge and skill. If you outsource the software creation, somebody
else is reaping the benefit of the knowledge you paid to create, and
will shortly be applying that skill to other companies, some of them
your competitors.
For non-core software, that's fine. Some companies now don't just
outsource their payroll software, they happily outsource the whole
payroll process. But for software that's part of your competitive
advantage, outsourcing is a terrible business decision.
That's why outsourcing doesn't really worry me. One a recent project,
investors quizzed the CEO on why he wasn't outsourcing the development.
Both he and the VP of product development vigorously defended the
decision to do the work in house. Why? Because the competitive landscape
didn't allow them the extra time and effort that outsourcing requires,
and they needed to be able to respond to changes in that landscape
within days, not months.
William
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