Outsourcing has been written about over and over for the past several decades. Stories for and against the whole idea. Here is a slightly different look at the Pros and Cons of Outsourcing.

The Pros of Outsourcing

While Cost advantage is the most discussed positive of outsourcing I am not sure if that is correct in its full sense. How many times have to hired a plumber to do something when you could have done it your self. The reason might not have been cost, its more about time and sometimes the price of time is just priceless.

The biggest pros of outsourcing is that it lets you give some of the work to someone else (and in IT this means lower cost and that is a bonus) who do it for a living and buy your self the time to do what you like or what is more important for you.

So its not cost, but the opportunity for you to buy and manage your own time while being ahppy that the work will be done by a professional

The Cons of Outsourcing

This is also related to time, but in a different way as it deals with the kind of outsourcing partner you work with

When cost is considered as a prime criteria then you end up spending more time to save money (managing relations) and in the end loose money because your time costs you more.

So the biggest cons of outsourcing is that there is a high chance that you end up choosing the wrong partner. Every outsourcing vendor might have a strong value proposition that a customer would find attractive. But It is also true that it might not be a  value add to you.

Just because a vendor does a great job it does not mean they will be best suited for you. You need to scout for your own vendor.

The same goes for vendors, if you have a value add that you can give and you don’t choose your customers properly, you will end up selling the wrong stuff to the wrong people who will never know its value.

It is nothing different from dating. Not all girls like all boys and vice versa. You need to find your best match and that can only done if you are ready to openly discuss and take the relationship as a partnership.

More on this later…

An old Debate that is still relevant; and there are a bunch of valid points on every side. Most arguments on all sides are reasonable and often correct and it all finally drops down to an individual or the company that makes the call.

The question is what’s best for me, for us?

Is cost alone the reason to make a choice?
Offshore has always been associated with lower cost and so when it comes to financial gains it without doubt will excel both the other options. But are you looking for the cheapest option or are you looking for the best option. If cheapest then you still have multiple choices of a location that you can choose from. Here again you have to make a choice that is sometimes beyond just cost.

Argument: Cost is not necessarily the reason in deciding where to get the work done. In business you don’t buy things because they are cheap.

Can Quality be the benchmark for Choice?
May be, May be not; Define what’s the quality you aim to achieve, Once you do that it might happen that you might have a different point of view. There are a few who believe that Onsite brings better quality of delivery than offshore; again debatable, and depends on what quality you envisage to bring into your product

Argument: Quality is very important, but just not strong enough a point to bank as every software fails, though some fail everywhere. You can always improve; process, time and money available is what will define the quality in the end. So again, not the one reason to choose your model

Should Control be your rationale?
Having the group next to you often in the next cubicles where you can call a quick stand up and address the issue then and there and rectify any fall outs. That sounds great and a real boon of having onsite resources. But then how many situations come up that demand blitz stand ups in a work week. If you have too many you have a problem, may be the process, the idea or the team. It is also possible that you are raising your hand for every single sign of doubt when what you should really be doing is give time. You have workarounds for daily stand ups even when the team is distributed, so control is not always about being together, but the knowledge that an option to be in one room if needed is not an impossibility

Argument: Get things done without meeting; and you are sure to get more done in the same time. Being able to control failures does not necessarily guarantee success.

Is there a reason that one can bank on making this choice; the answer is yes.

Market Readiness – The aim to be Market Ready fast and on Budget. This is the only reason a software company is in business and should be the only reason when they decide on anything

You could offshore; for cheap labor and end up with lost time, opportunity and future while saving a few bucks

You could Onshore; feel good the work did not go out side the country and yet be in the same state

You could do onsite; and risk running out of cash and not test enough, launch and then have a disaster

You could also choose to decide what Market Readiness means to you and direct your focus in getting the damn software out in the Market rather than chewing over models, because if you don’t decide what and when to release your product and achieve it as planned, it is not an issue how you do it

Assuming your idea is great, failure is always the failure in being ready on time. If you are market ready faster and cheaper you and your investors will know if your idea is worth putting more into.

You can contact the Author here to discuss on how a Market Readiness Process works in defining a product road map.

‘Market Receptiveness’ is the key to success when your software product evolution is influenced a good deal by what the Market demands. It is a mix of budget cuts and lack of time that eventually put product owners in the hot seat when nearing their release date.

The realization often comes too late costing companies one the most feared business catastrophe “Missed Opportunities”.

Offshore Outsourcing has been in the radar for a long time, it was mostly about cheap labor but then it graduated to being a more value oriented proposition. The recent years saw several processes coming up that have made offshore outsourcing a key proposition of interest in both the investor and business community

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