The thrust of your comment was that the cost savings are compelling and worthy of investigation. The thrust of my post, however, had nothing to do with the development cost and everything to do with the seldom-seen readiness of internal teams to absorb systems and components built by outsiders (either down the street or across the ocean). I summed up: “So here’s my point: creating crisp handoffs, per the skeleton outline above, is something you absolutely must do if you ever hope to outsource. ”

It seems that you somehow read my post as categorically opposing offshoring; I don’t, which is why I wrote this post to explain my stance more completely. While I do have some healthy skepticism about offshore development, I have indeed seen it work effectively. Instead, I choose to emphasize the internal preparation needed long before a company can go down that path, because that is a prerequisite that is often missed amid the shiny appeal of dev cost savings.

Today, especially in this time of financial crisis and economic recession, outsourcing portions of business requirements to offshore companies is becoming more & more the norm.

Greater investment to return ratio, customised teams to perform the work without the expensive permanent staffing & management and a quality control of the product/service that is greatly improving, this fast-growing alternative is showing that what was once considered to be high risk and hard-to-control is fast becoming and alternative that cannot be ignored.

Small, flexible teams operating under controlled supervision by experienced managers with cultural and technological experience is proving to be a valuable commodity.

Large software houses are cumbersome with in-flexible internal processes and fixed overheads that must make high margin to cover costs, hence, their products/services prices are greatly inflated.

One such Swiss based company recently quoted 700 man hours over 6months for development work of a web-based application to the tune of CHF750,000!! Something which an offshore software development company would be able to do for 1/10 of the price (dependant on location and the specifications of course!) and possibly a shorter delivery time.

These savings are hard to ignore when the financial pinch is being felt everwhere.

For SME’s and Start-Ups everywhere the question is not whether or not to consider an offshore software development as an alternative to a large, established software house but which alternative to choose from!

The market is lush with choices for an alternative and many savings to be had. Worthy of further investigation no?

Val Jelinic

Business Development Manager
MNG-Europe SA
Fribourg, Switzerland