I was thrilled to read “Agile Principles and Achievement of Success in Software Development: A Quantitative Study in Brazilian Organizations” by Paulo Henrique de Souza Bermejo et al. Why is it so exciting? Because the authors use a novel approach to quantitatively and statistically evaluate what software development organizations do and how that is linked to success. Continue reading →
Finally and perhaps not most importantly cost savings
Based on my own experience and on what is reported in the literature the actual of cost savings of outsourcing to a low cost country is often only slightly lower than keeping the development in house would have been. I have seen figures of around a 15% saving for a successful offshore. It is nice to know that we have reached the level of maturity where we realize that the lower hourly costs are offset by higher communication costs etc.
Finding and retaining highly qualified staff is a major bottleneck in the operation of many companies today (link, link). Outsourcing of course gives access to a larger pool of resources.
Most of what is said in the article is nicely summed up by the following quote from Meyer:
Successful outsourcing companies like to say that customers come for the price and stay for the quality.