Programming Market in U.S.
vs. Offshore
Courtney Stephens
IS 553
Term Paper
Outlines
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What is offshore outsourcing?
History
How Offshore Works
Benefit of Offshore outsourcing
Issues with Offshore Outsourcing
When to use and when to avoid
Successful Implementation factors
Key Players
Marketplace Analysis
What is offshore outsourcing?
• Refers to services that are performed and
delivered from Centers in countries which
are remote from the clients location.
• Investor set up operation overseas for
product development, design, software
development, and research and development
of projects.
History
• The first wave started two decades ago with the
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exodus of jobs making shoes
Cheap electronics to developing countries
Toys to developing countries
Simple service work, like processing credit-card
receipts, and mind-numbering digital toil
Writing Software code, began fleeing high-cost
countries
Information technology jobs for most part moving
offshore to countries like India and China, because
of cheaper labor.
How Offshore Works
• U.S. Ambassadors – Facilitate communication
by sending U.S. Developer and U.S. analyst
to offshore centers and to communicate
system requirements and technical issues.
• Offshore Ambassador - Send Offshore
Developer/Analyst to U.S. Team to get better
understanding of systems requirements
• Using Test scripts from customer to help
understand requirements
• Growing the business by having someone
local to the developer offshore that
understands business requirement
Benefit of Offshore outsourcing
• Jobs going offshore to save on cost
• Utilize the skills and talents of the R&D and
programmers that can found in these offshore
countries.
• The area of studies and the level of the education
and area of studies seems to be in demand, so
companies that does product development and
sees the need to invest in offshore
• Access to resources that save cost, availability of
talents, skill, and quality
• Project get completed fast and at low cost
Issues with Offshore Outsourcing
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It locks face-to-face communication
Need constant monitoring
Costly if requirement are not fully understand
Rely on rapid feedback from client
It is plan driven so detail and requirement of
system need to be fully understood at the offshore
center
• Security system and policies that are place to
prevent theft and piracy
When to use and when to avoid
• Understand the system development process
• Check for compatible to see if it meet the
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system requirement of the customer
Check for talented developer, skills, and
quality of work
If project require a lot of on-site interaction
If security is going to be risk
Research offshore center for integrity
Successful Implementation
Factors
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Elaboration Phase
– Prevent some of the major
technical risks
– Put in place a system or process to
understand what it takes to be a
successful offshore center.
– Developing a demonstration
version of the intended system to
see how it work in respect to
customers requirement
– The adoptability of Software
developed
– Can it be easily integrated with
other software application
– Perform load test on the system
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Transition Phase
– The project is ready to be delivered to
the customer.
– All system requirement need to be in
placed per customer request
– Check functionality of the system,
system performance, quality, and
standard of system .
– Test in its operational environment
with different level of users
Inception Phase
– The project managers need to take into
consideration the nature of the
business
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The U.S. Business Analysts need to
meet with the Business group
– Find out system requirements
– Understand the scope of the business,
– Know the nature of the business, what
it supports, and goal/future plan.
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Construction Phase
– Built a proto-type or an executable
programmer of the system that is going
to be implemented.
– Develop system to measure up to
policies and system guidelines
– Develop credibility and rapport
between site locations
– Drive for smooth transition when
system is ready for implementing
Key Players
Companies/Investors
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IMB
Bank Of America
Andale Inc.
Oracle
Cisco System
Intel.
General Electric
Jboss Inc
Countries
• U.S.
• India
• China
• Philippines
• South Korea
• Taiwan
Resources
• Engineers
• System Analysts
• Software
Developer
• Project Managers
• Business Analysts
Marketplace Analysis
• Bank of America has slashed 3,700 of its
25,000 tech and back-office jobs. An
additional 1,000 will go by March
• Jobs that costs $100 an hour in the U.S. gets
done for $20 in India
• 3.3 million white-collar jobs and $136
billion in wages will shift from the U.S. to
low-cost countries by 2015
• 40% of America’s top 1,000 companies will
at least have an overseas pilot project under
way within two years
More Information
• http://www.businessweek.com/magazine/content/03_49/b3
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861010_mz001.htm
http://www.businessweek.com/magazine/content/04_20/b3
883090_mz063.htm
http://www.businessweek.com/magazine/content/03_05/b3
818001.htm
http://www.businessweek.com/magazine/content/03_49/b3
861011_mz001.htm
http://www.martinfowler.com/articles/agileOffshore.html
http://www.businessweek.com/magazine/content/04_02/b
3865028.htm
Questions?