Outsource Software

The market for all those one time high paying computer programming jobs are starting to be filled be less expensive offshore software developers.  Welcome to the world of global competition in offshore software development.  Depending on your context, offshore software development can be viewed as a new competition threat or opportunity in new resources.  Or, it can be viewed as a combination of both. 

As an American, I believe there is mostly a negative conatation towards the trend of large American companies offshoring jobs.  You know, the underlying tone is somthing similar to “big companies only care about profits, not people”.  Honestly, when the topic is big business, I can agree with points on both sides of the discussions.  But, what is often lost in these discussions of offshoring software development jobs are the opportunities it creates for small business.

I’m living proof that small business opportunity lies in being able to win local clients and then clearly articulate and manage the project to offshore developers.  For me, more time needs to be spent thinking on strategic level concepts and ideas rather than fulfilling tactical level operations.  I did not realize this overnight and it has taken me years to accept. 

As a software developer, my industry is in a state of flux.  Is offshoring software development a good thing or a bad thing?  The jury is still out and the discussions are usually quite lively.  Over the years, I’ve heard the following snippets in the discussions “quality vs. cost”, “you get what you pay for”, “we tried offshoring software development once and now we spend all day fixing offshore developers code”, “we saved a boatload of money by offshoring certain tactical aspects of software development”, etc.  In my experience, these points have more merit in big company circumstances compared to small business.

Clients for website development expect to pay lower fees than they did in the 90s regardless of their company size.  As a small business owner, I’m unable to maintain a sustainable profit margin with lower client fees.  What can I do?  Simple.  Hire offshore developers at lower rates, so my profit margin allows the projects to be worthwhile.  The opportunity for me is to spend more time on clearly defining technical architecture, project management and communicating regularly with developers and clients rather than writing code. 

Win-win-win: Client wins, my company wins, offshore software developers win.  But, when there is a winner, there usually is a looser?  The looser in software development landscape shift is the small business that refuses to adapt to global competition or utilize these global resources.  Or the individual software developer who refuse to adapt to lower rates and more pressure and competition to innovate.  And no, building walls around ourselves and the industry is not the answer.   If we try create global software development competition barriers, we are creating a path towards loose-loose-loose.

 

“The best way of choosing a coder depends on whether or not you have a deadline that you need your project finished by. Put another way, the best way depends on whether you have more time than money, or money than time.:

If you have a deadline (more money than time)…

…then the single most important criteria in evaluating a coder is his/her previous experience on the site (followed closely by their job skills).

Narrow down your coders only to ones that:

1) Have done work on the site before in your price range. (click on their name to see their work history). Don’t pick a $100/job coder to do your $10,000/job and vice versa. Make sure the coder has received favorable ratings from past buyers. If a coder has 2 or 3 or below average ratings (below 5) then that is a warning sign. You may wish to skip them and move on to another.

2) Have a resume that matches your project requirements. (click on their name to see their resume). The closer their resume is to the skills required to accomplish your current project, the better.

The #1 mistake that inexperienced buyers with time frames make is picking the cheapest coder. This generally means the coder has no work experience or history on the site. Then, when the project is not completed on time (or at all) by their ‘discount coder’, they are stuck in a bind. (The Rent A Coder escrowing process protects their money, however, their problem is that they want completed software, not their original money back.) So, if your timeline is important, don’t make this mistake.

If you have NO deadline (more time than money)…

…then time is on your side and you should strongly consider taking a chance on a coder with little or no work experience on the site.

You can generally get quite a discount this way, and you can do it safely, since the Rent A Coder Safe Project Escrow protects your money should they not deliver. In the worst case you can simply pick another coder at no charge, but in the best case you pick up your project for substanially less money. This can result in getting the project done for a lot less money.

   Another issue that many English-speaking buyers have, is whether or not they should consider coders where English is not the country’s first language. These coders can be 50-75% less expensive than native-English speakers and so this is a very good question. The answer depends on your situation. If you have a well defined project (meaning a thorough, well-laid out requirements document), then choosing a non-native coder can be a great way to save a lot of money. However, if you have a less well defined project, then you will be relying a lot on the coder to communicate with you to ‘flesh’ out your program. If this is your case, you may wish to consider using a native English speaking coder. If you would still like to try a non-native-English coder…make sure that you can understand them and that they understand you in your correspondence.

   One additional issue is that of confidential and proprietary information. If you have a project that involves this type of information, you should first be getting any coder you are considering, to sign an Non Disclosure Agreement (NDA) to protect that information. However these agreements (like any contract) have no teeth if the country the coder is from doesn’t enforce them. If the coder is from such a country and walks away with your secrets, you may not have much recourse. So to protect yourself, after having your attorney draw up an NDA, ask them which countries you should avoid. Generally 1st world countries have excellent intellectual propery laws and agreements, but you start to take a risk once you go to a country that is either 2nd world or a developing country. Your lawyer can advise you of the specifics depending on your contract, and make more specific recommendations.”

Copied from Rent A Coder Faq

I took a moment to analyze the current 3 web development projects I have outsourced via Elance and RentACoder.  Using these 3 projects, here are the bids by country breakout:

India 22 Romania 9 USA 4 Argentina 2 UK 1 Russia 1 Pakistan 1

What do we learn from these numbers?  I’m not exactly sure, it’s small sample size.  I find the lack of diversity interesting.   In other words, I expected to see a larger population of countries participating in the web development project bidding.  Also, I’m not experiencing offshore web development bids from China or Ukraine

The web development projects in question here are 1 web design, 1 oscommerce customization, 1 web design and web development with backend functionality.

 

But, according to Ephraim Schwartz at Infoworld…

“If your career plans are set on doing heads-down programming, you
better plan on six months of unemployment checks, then looking for another
occupation,â€? the source in Washington says. ”

This article is a little dated, but it still provides a good looking glass into the future with government report estimates.  The article also reference

“Projects that require a high level of creativity, insight, innovation, and thinking outside of the box are also likely to stay onshore, as are jobs requiring process design and business analysis; technology and systems integration; and fusion of industry knowledge with a high level of IT skills. ” 

This really shouldn’t surprise any software developer at this point.  Software architects are going to be ok.  Developers need to be willing to take on software design and management responsibilities.

Image by Jery ‘Riverman’