“Prenuptials For Offshoring” – Computerworld January 23, 2006

I read an article in Computerworld’s January 23 issue titled “‘Prenuptuals’ For Offshoring” and it made me think. Those of you who know me know that I’m no fan of offshore outsourcing. This article talks about things to put in your offshoring contract. Apparently it ain’t all that easy to get your money out of these folks if things turn sour. The expert quoted in the article (an attorney) recommends putting lots of escape clauses in the contract so you can get out of a bad relationship (or if you’ve committed lots of business to the particular outsourcing company, get out of the parts that are going south without having to sacrifice the relationship).

It’s interesting to see what’s going on in Offshoring. I think it can work, but it’s difficult and takes a lot of organizational maturity (something I’ve seen little of in my 15 years in IT). Management is convinced that if we can utilize the same number of developers, but pay them 1/4 (and they’re also not employees, with the commensurate expense involved), then holy crap, batman! We will save a ton of money. And you know, that may be true for release 1. In release 2 (after your onshore team, smaller – due to layoffs – and not exactly happy campers) fixes the crap that was delivered, it costs twice as much. No worries, we’re still saving money. Release 3 is where the whole thing implodes. Believe it. Costs will spiral out of control. Management will reorg (the scapegoats will be the ones who either are reassigned to “special projects”, are senior managers that now have no staff, or have decided to pursue “other career opportunities”). The tattered remains of the development staff will be interviewing a motley crew of applicants (after months, of course, of looking “internal” – to no avail).

Okay, I digress. The point is this: when Computerworld is interviewing lawyers because it’s relevant to offshoring (the message: “Watch your ass.”) it may be time to rethink the whole thing.

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One Response to ““Prenuptials For Offshoring” – Computerworld January 23, 2006”

  1. Dan Chisarick Says:

    I’m hesitant to make broad, sweeping statements on just about anything, especially something so complicated. I remember (when offshoring software was starting to grow in popularity) the scores of articles describing how talented and capable offshore developers are, etc. etc. Seemed there were new success stories every day. Of course many books, movies (and nearly every Microsoft product) have rave reviews ready to go even prior to their release, perhaps this is no different. Years later and its still a mixed bag. Yes people have grown far more adept managing a geographically distributed team, but they’ve compensated for it by throwing more difficult problems at it (seems to be sort of a theme regarding the evolution of software development in general, yes?) We’re in an environment where offshoring is the answer but some people forgot what the question was. Make it work no matter what the cost (huh?) While my experiences are mixed (some good, some bad) I think that any effort to legitimately “solve” the fundamental problem of managing offshore may ultimately lead to an organizational structure that can efficiently satisfy project deliverables and resource constraints using mostly (or wholly) internal staff. Sort of ironic.

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