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In this article I summarize my experiences with working with an outsourced IT development team for just over a year.

Introduction

If you've been working in IT for any length of time, you undoubtedly know about the rise in outsourcing IT work over the past few years. Typically, IT outsourcing is synonymous with hiring a consulting firm in India, but many US firms also offer IT outsourcing services. Outsourcing is one of those business ideas that looks great on paper, but has hidden costs that often outweigh the benefits.

My experience with IT outsourcing began in early 2004. The company I worked for at the time, Transcender, had recently been purchased, and part of my job after the buyout involved managing some of the projects that the team in India worked on.

First Impressions

It took some adjustment to get used to the idea of working with outsourced developers. Some of my friends had just been laid off, perhaps at least partially due to the fact that the company had a team of developers working in India.

Incidentally, putting names and faces to the outsourced developers forces you to change your perceptions. You realize that these aren't evil people trying to put you and your friends out of jobs. They are generally just hard working people trying to earn a living and better their lives, just like we are.  It's a shame that all too often it ends up being an us vs. them scenario, because I suspect there's a lot we could learn from each other given the proper environment.

Continuous Improvement?

Not long after starting working with us, the team in India was given the tasks of creating study guides and a few practice tests. Writing clearly and concisely for a largely English-speaking audience is difficult even for many Americans, but I can only imagine that it's doubly difficult for someone who speaks English as a second language. Additionally, most of the outsourced developers were inexperienced in writing practice exams and study guides. As a result, the creation of these practice tests and study guides took much longer than if they had been written by experienced internal staff. So, time to market was much longer, and I'd be surprised if the actual costs of those products were much lower during this time. But, the management of the company was committed to the relationship and was willing to spend this time to teach them their methods of development in order to save costs in the long run. This had the not surprising effect of causing at least some of the internal developers to fear that we were essentially training our replacements. It became painfully obvious that we were looked at essentially as an entry in the financial report, and any attempt to reduce that cost would be considered. This was not a recipe for success.

At any rate, the outsourced developers were given more responsibilities in writing practice tests. Eventually, we were told that all content development would be done in India and our jobs would be to review that material. The only problem with that plan is that we were seeing a lot of turnover in the Indian firm, and many of the same mistakes were repeated due to a lack of experience, which was frustrating and led to further morale problems. By the time I left Transcender in May of 2005, I think that only 2 or 3 of the original team in India were left. Based on talking with other people who dealt with similar arrangements in other companies, this seems to be normal for this type of work in India. Additionally, Transcender experienced internal attrition as well due to poor morale and other reasons, with about half of the original developers leaving the company during this time.

I felt that the message that we were getting as internal developers was clear. The quality didn't matter; outsourcing was cheaper and that was the most important thing when it came down to it. Of course, this isn't what we were actually being told. We were being told that it was our job to ensure that the quality remained consistent with out customers' expectations, but were given constraints that ultimately proved unreasonable, in hindsight.

Lessons Learned

I believe that there are several lessons to be learned from my experiences working with an IT team from India. The most important lesson in my opinion is to ensure that you are aware of the hidden costs. There will be communication difficulties that you will have to overcome. There will be culture issues that you will have to address. There will be a learning period, which may become much longer than you anticipate. All of these things take time, which doesn't directly relate to the bottom line, but will quickly affect those things that do. Anticipate a high turnover rate. Anticipate a much larger amount of overhead and oversight than you think. If you plan appropriately and factor in the hidden costs, then it's possible that outsourcing can help you manage costs. However, if you're considering outsourcing development on a product that is critical to the success of your organization, then I don't think that the cost savings are worth it. You're likely to lose control of the development process, which will affect the quality of the product and could affect internal morale, both of which will ultimately hurt sales.

Conclusion

My conclusion is that you should never outsource the development of your core product. Furthermore, I don't think that IT outsourcing, in general, is the answer for saving money. Outsourced developers, regardless of location, do not have any attachment to you or your product other than the check that they receive each month, so it's unlikely that they'll put the same amount of thought and effort into creating the product as internal developers. You will spend more time than you can imagine simply communicating back and forth. While I think outsourcing may work in some situations, such as when the outsourced firm has expertise that you do not have, be aware of the hidden costs of managing the relationship, which can often be much higher than you think they will be.

posted on Tuesday, November 29, 2005 12:38 PM

Feedback

# RE: Outsourcing - A Year in Review 11/29/2005 2:57 PM TranscenderMichael
Brilliant article.

Like Josh, I worked for Transcender and left (a couple months after Josh did) because of the reasons above: we were expected to release a product with the same quality as Transcender used to produce... using personnel that were wholly unqualified to perform the job. This caused me to stay up late working to ensure a quality product, not just a few nights a week, but almost every single night. I poured my heart and soul into the product because our customers relied on me to ensure that they could use our product to not only pass an exam, but also to actually *learn* the material. The company, the product, and the customers meant that much to me that I would work extra, unpaid, to make sure that it was *right*. I can't say that the folks from India felt the same way - as Josh said, they're not attached - they're doing it for a paycheck.

The writing I received from India was horrible, both technically and grammatically - on occasion, large sections were plagiarized directly from other texts! I had to rewrite major sections of text (we're not talking paragraphs... we're talking chapters) and deleted entire questions. When I made changes, I commented each one so that the author would not make the same mistakes again - but it was all for naught, because the same errors appeared over and over again. The attention to detail was practically non-existent.

Our supervisor consistently told the outsourcing company that their efforts were insufficient, but all she gave were words with no action. Absolutely nothing changed except the fact that the outsourcing company was rewarded with even more responsibility... and promoting mediocrity is something that I cannot stand.

It was frustrating to have to watch my job responsibilities be transformed from writer to editor... while unqualified individuals were being allowed to do the job I was originally hired to do... to write content.

Before anyone labels me as anti-Indian, allow me to state that I would have been just as upset and dissatisfied had we outsourced our writing to Americans who were unqualified to write our products.

In most cases (if not all of them), I could have literally written the products faster from scratch... meaning, Transcender was paying me AND the outsourcing company to do the job that I could have done (better) on my own. I honestly don't see how that could possibly save money, either short term or long term. And I can guarantee that the quality is not what it used to be.

Perhaps Transcender did save money... they don't have to pay me anymore, do they? But at what long term cost to Transcender's reputation of quality?

TranscenderMichael
MCSE+I, MCSA: Security, MCDST, MCDBA, OCP, CCNP, CCDP, CNE, SCSA, CCSA, Security+, Linux+, Server+, Network+, A+