News

Out-sourcing again in Indiana

• By Jack Vaughan
• September 25, 2003

[Los Angeles, Calif.] - When companies consider out-sourcing of AD efforts, they often do ‘very simple math,’ Gartners’ Joseph Feiman told attendees at this week’s AD Summit in Los Angeles. While he agreed that beleaguered state-side AD managers will move more work outside the organization, Feiman said a sophisticated analysis of skills issues is needed in order to achieve the goals behind the drive to outsourcing.

Off-shore out-sourcing can be good, he said, but managers should also contemplate ‘on-shore’ out-sourcing. Overseas shops can surpass the U.S. in some areas of technology development, but they lack the in-depth knowledge of the actual business that states-side corporations display. And in some cases language can be a barrier.

“Do not rush into out-sourcing to India. Consider Indiana also,” Feiman said.

Beyond estimates of cost savings, one should consider the importance of communications and effectiveness of development, he said.

In fact, Gartner created a model that measures such communications and effectiveness. Proximity and common language, analysis shows, has benefits. For developers, the ability to walk into a nearby cube and solve a problem with another worker is beneficial, Feiman said. “Communications directly affect the cost of a project,” he continued.

But, overall, skills needed in development today are expensive to obtain in the U.S. Feiman has for some years been noted for his work to measure the cost of obtaining Java and J2EE skills, whether it means going on the open market or retraining programmers versed in COBOL and other traditional languages. In this, and in CMM, Indian shops, particularly, have begun to shine.

“Do not base sourcing decisions solely on the offshore pay advantage,” Feiman emphasized. “You must account for communication and effectiveness factors as they affect project staff and duration,” as these result in higher costs and reduced savings, he concluded.