Offshore Development Woes

In his excellent article: "Using an Agile Software Process with Offshore Development", Martin Fowler summarizes his experiences in using offshore development for large projects. While his particular emphasis is on agile versus waterfall development approaches and the specific twists for offshore agile development, he makes a startling conclusion regarding offshore development: "Certainly anyone doing it because they think they'll get cost savings similar to the rate differences is seriously deluding themselves. "

This really hit home for me. We've been seriously examining our rates, partly because of our perception of downward pressure caused by the offshore "threat". But as I looked at it more, it seemed to me that there were several misperceptions going on here. First, it turns out that offshore arrangements we're competing with are under a contract for a minimum number of hours. Well, I'm certainly willing to offer a generous discount for a commitment like that! But more importantly, there is the hourly rate perception.

Just because the hourly rate is lower does not mean the project will be cheaper. I've always felt that way, but Martin Fowler supports it with evidence. Fact is, offshore development carries a large communications and distribution overhead that offsets the lower hourly rate.

He also says that "anyone who thinks that onshore developers will triumph because they are more skilled is very wrong. We've found that we can hire just as talented developers in India as we can in North America and Europe." And this has been my experience as well. The talent available there is excellent, though (IMHO) not better than we have here.

So, at the moment, it would seem to me to be a question, not of savings or talent, but of industry knowledge. The real savings should come about by using developers skilled and knowledgeable, or at least conversant in the industry area the development is supporting.

I say, the playing field is level, competition is good, let's sharpen our tools and have at it...