8 Killer Reasons why Firms who stay onshore will thump the offshorers

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Stay Onshore
Stay Onshore

Companies Who Stay Onshore

Those companies who stay onshore, and keep their IT capability onshore, will win in the end.

Those that work in IT have watched in horror as they‘ve seen thousands of IT jobs being outsourced offshore to places like India. Even companies that have not touched it so far will be considering it.

So, when it comes to the time when the company or client that you are working for is looking at the situation to see if they could benefit from the cost gains from offshoring, it would be as well if you had some ammunition on the disadvantages of it.

Unknown Consequences

Too few companies have tried it. Therefore companies doing it at the moment are taking a bit of a risk. Perhaps in a few years time the newspapers will be full of examples where it has gone wrong

Political Consequences

As more and more jobs are shipped offshore, this issue is going to higher and higher up the list of important political issues. Unemployment usually is a lagging indicator, and normally starts rising at this point in the cycle. It is going to get very difficult for the government to explain why they are allowing so many jobs to go offshore. Companies that have sent jobs offshore may become the villains of the piece. Also their customers may not look kindly on what they have done

Fewer Customers

As more and more companies send their systems development capability, as well as other jobs, offshore, fewer of their customers in the UK are going to be able to afford to buy their products. Many of them will be unemployed. Those still working will have to compete with the low wages paid to offshore workers. Those that have gone offshore will get the blame for this, and their products may suffer. That’s even if they are a little cheaper

Data Shipped Offshore

Many customers are not aware, at the moment, that personal information about them is being shipped offshore. According to trade union Amicus, there may be Data Protection Act implications. Even where there isn‘t, the customer‘s data is less secure than it used to be. There will be bad publicity for companies who send their systems and data offshore, when their customers‘ personal information is misused. Just imagine the publicity if a terrorist got hold of information about a UK customer from a UK company who had sent it offshore. Also, what bad publicity it would be if someone in India had stolen someone in the UK‘s identity to purchase goods and services

Time-to-Market

This is a far more important business driver than cost in normal conditions for most companies. Those that are getting cost advantages now from offshoring may find that their competitors have the more important Time-to-Market advantage on them in the future, as they have their developers onshore

Joint Application Development

Those who have their Business Analysts stay onshore will have the advantage of having them close to their Business Users (who will not be going offshore). During the development of a business system there is always a lot of interaction between users and Business Analysts. This helps greatly to give the business users the system they want – and not what they ask for, or what the Business Analysts think that they want. Joint Application Development, which contributes so much to speedy and accurate systems would not be so easy with offshore developers

Analyst / Developer Interaction

Those who have their developers stay onshore will have the advantage of having them close to their Business Analysts. There is always a lot of interaction between developers and analysts during the course of a project. This helps toward building s a better system

No Reality Check

Because of the culture of Indian developers, and others from the developing world, they don‘t like to question those further up the hierarchy than them too much. Therefore you tend to get the systems that you have asked for rather than the systems that you want. There is no reality check.

In the UK, during the course of a project, there will be so many times that a developer will go over to the desk of an analyst and say ‘Did you really mean that’ resulting in a change to the specification. Indian developers are far less likely to do this. You get what you ask for – no matter how ridiculous it is

Who Will Win This Battle?

So, who is going to win this battle? Will it be those that have cut development costs by going offshore? Or will it be those that have Time-to-Market and the other advantages from deciding to stay onshore?

Those that have made the correct decision will be the ones who will reap the most benefits and will be more likely to grow as a company.

The game will really be on over the next few years. Those that have offshored may well find that in gaining cost advantages, they have lost the crucial Time-to-Market advantage.

If so, they‘re really going to lose out.

I hope they do!

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