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The quality of software development carried out offshore matches or exceeds the quality that onshore software developers produce, a new report has found. Most software companies questioned by US-based SIIA said that when compared to domestic staff, offshore developers were ‘good’, ‘excellent’ or ‘outstanding.’ The report, obtained by Contractor UK, says such a high standard of delivery was the biggest surprise to the 114 software firms, most of which grew their offshore presence in 2006. Although based on the experiences of US companies, the Association said the overall findings indicate offshore “software development is now part of the business mainstream.” The “most significant” change initiated by this businesses mainstream was hailed as the offshoring of IT functions higher than support services, maintenance and quality assurance. In fact, product development was the most common activity offshore, while over a third exported their company’s division for professional services, SIIA said. Cost is the main incentive for firms to offshore, but the software group said it is now “only one of several factors,” alongside increased speed to market and better product quality. Reducing costs is a “fundamental reality” of offshorng, but most companies eyeing offshoring overseas, typically to India, were not seeking to displace onshore workers. David Thomas, executive director of the Software & Information Industry Association's (SIIA) software division, reassured domestic IT professionals. “[Offshoring] was used almost entirely as a form of expansion, not as a replacement,” he said, reflecting on the intentions of the software vendors polled. “There's a lot of negative talk,” particularly within politics, about offshoring costing Americans jobs, Mr Thomas said, before adding: “That's not really the case.” Conversely, efforts to limit globalisation, open markets and trade to prevent the perceived ‘flight’ of US jobs abroad serves to harm national competitiveness and “stifle job creation,” the SIIA said. Elsewhere, the analysis found 73% of software firms have witnessed a rise in profits since they offshored, while all respondents claimed to be meeting 80% to 100% of their cost saving goals. Although the financial expectations were met, hopes of efficiency were not – as one in five expected a decline in productivity, though almost a third actually experienced a decline. Firms have also underestimated what it takes to succeed in the global market place. Setting up processes – at home and offshore - emerged as the biggest overlooked challenge and the recruitment of staff in offshore locations was among the biggest disappointments. Jan 19, 2007 Email this article Printer friendly page Previous Page
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