The Mexican government is offering tax incentives to Indian IT companies that set up shop in their country according to a brief Emerging Markets NOW report. Indeed, I have already read of Indian IT creating software development centers in Latin America to better serve customers in the U.S.

Of course, you can work directly with software development vendors in Latin America and there is a recent increase in the number of Latin American vendors including new partners in the Accelerance Global Partner Network.

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The clocks in Argentina were moved forward by an hour at the end of 2007 to help with an energy shortage in the country. The new president of Argentina, Cristina Fernández de Kirchner was given the power to change time zones with a new law passed just before the change.

The impact on outsourcing is good for Europe and not so good for the U.S. if you are looking for complete workday overlap. Buenos Aires is now 3 hours ahead of New York. That’s only 2 hours behind the U.K.

See the current time in all major global software development locations in the World Region Outsourcing Guide on the Accelerance website.

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February 21, 2008

Accelerance will sponsor the SD Forum Event, Software Engineering Management SIG featuring guest speaker, Dr. Ivar Jacobson, founder of Ivar Jacobson Consulting. The event starts promptly at 7 p.m. Registration begins at 6:30 p.m.

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Small company CIOs say they have little interest in increasing their offshore outsourcing in 2008. That’s according to a survey performed by the Robert Half recruiting company.

What’s more, 94% of CIOs surveyed said they don’t outsource IT jobs outside the U.S. at all. And 59% of have stopped IT outsourcing because of “management challenges” as the top reason.

Only 3% of companies with 100 to 250 employees do offshore outsourcing. Here’s several reasons according to a Robert Half executive:

“Researching viable vendors, and teaching them about the company and its products, management style and quality control require a substantial investment. Large companies may be better positioned to absorb the costs of both initial setup and ongoing oversight, and to benefit from economies of scale.”

I agree.

The survey deals with IT outsourcing in general and not just software development but I think the same lessons apply. Large or small, you have to be prepared to handle communication challenges and be able to describe what your software needs to do.

At least with Accelerance, you have instant access to those “viable vendors” that seem to elude the survey respondents.

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March 7, 2008

Steve Mezak will be speaking on “Offshoring: Pro’s and Con’s” at the SD West 2008 Conference in Santa Clara, CA from 10:15 a.m. to 12:15 p.m. The session discusses the benefits and the issues involved with offshoring of software development. Where should you offshore? Popular countries are compared, including India and China. What are the real cost benefits? Steve and fellow panelists will discuss when it does and does not make sense to move software development or testing offshore with real-world examples.

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It’s easy to run into many hardworking people of Mexican origin in California. Mexico is a large and diverse country with a several great universities. Mexicans are also coming to the U.S. for high-paying white collar jobs in addition to the manual labor they are famous for.

I heard this story on the radio yesterday that tells how some of them are also becoming high-tech entrepreneurs.

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A survey made by CIO Insight says there will be a shortage of IT workers for smaller companies that will cause salaries to increase by 25% in 2008. This could be a double whammy if a recession hits us this year too.

Lack of viable candidates may force more companies to seek talent, and lower costs, by looking offshore. So far, there is not a talent crunch offshore but you have to be careful and select the right kind of partner company that is prepared to deliver the kind of services you need.

Accelerance partners are carefully screened to collaborate with you to deliver software development services in a reliable way.

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There was a short article in the New York Times about the benefits of outsourcing for small businesses. The article doesn’t deal with global outsourcing but just the concept of outsourcing itself.

The article will be helpful to you if you are thinking about outsourcing your software development and just cannot seem to find good programming talent to hire in your location. Instead of hoping for good programmers to arrive at your doorstep, you can have your own team of programmers provided by a vendor elsewhere in the world. And of course, it can be a lot cheaper than hiring employees.

The article offers these long term benefits of outsourcing:

• Control capital costs
• Increase efficiency
• Reduce labor costs
• Focus on your core business
• Level the playing field
• Reduce risk

OTOH, the article points out there are these risks to manage:

• Management: The outsourcing company must be prepared to manage projects across time differences and cultural barriers.
• Quality control: The outsourcing company needs a clear set of guidelines, expectations, and processes to manage the quality of products or services rendered.
• Taxes: Employing several outsourced for-profit enterprises can impact the taxes assessed on the outsourcing company.
• Liability: It can be difficult to determine the liability of different parties involved in complex outsourcing relationships.

But these risks can be managed and you can use a firm like Accelerance to do it if you need help. In summary the benefits of outsourcing, especially when you can’t find talent locally, can outweigh the risks.

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