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WHITE PAPER
Speeding the Search for
Offshore Developers
The Benefits of Offshore Software
Development Networks
Companies exploring offshore software development often find anoverwhelming array of options. For example, is India the best choice? Whatabout China, Russia or Brazil? Time, distance and language barriers alsomake it difficult to assess the quality of offshore developers. Add geopoliticalinstability and intellectual property issues. CEOs are often forced to makedifficult outsourcing decisions that will directly affect the future of thecompany.
How can businesses reduce the risks of offshoring? Is there an easy way tolocate developers and evaluate their quality?
To address these challenges, companies are turning to offshore softwaredevelopment networks. These networks provide rapid access to prequalifieddevelopers based on a range of criteria, such as location, programming skillsand English language proficiency. As a result, businesses can narrow theirfocus to a short list of highly qualified vendors and cut months from theirramp up efforts.
This white paper will examine some of the challenges businesses face whenseeking offshore development partners and reveal the many advantages ofutilizing offshore software development networks.
Offshore Software Development Trends
More small businesses Smaller software companies are jumping on the offshore bandwagon. Aare offshoring the significant 27 percent of software companies with revenues less than $100software development million intended to offshore development in 2006, up from 20 percent inprocess 12005.
1 Briody, D. (March 6, 2006). CIO Insight. Small businesses struggle to offshore.
Accelerance White Paper August 20, 2007 www.accelerance.comPage 2
Price has been the key factor in deciding where to offshore. "Ninety percentof all outsourcing deals in the market today have been structured around costimprovement only," says Linda Cohen, vice president of sourcing research at2consulting firm Gartner.
However, certain parts of the world are experiencing significant annual rateincreases. For example, in Bangalore, India, salaries of programmers are3growing at a rate of 14 percent annually. The escalating costs of labor inIndia combined with high turnover have prompted many American softwarecompanies to look elsewhere for talent. With the growing demand ofoffshore programmers, finding the right developers among a sea of choicesis paramount.
Challenges Finding Developers
The high costs of local programmers, difficulty identifying reputable offshorevendors and problems assessing the quality of those found are majorchallenges for American software companies.
Local Development Is Costly
The high costs of Developing software within the United States is a costly endeavor.American programmers, Recruiting and securing the right individuals can take months and involvescombined with a decline recruiting, interviewing and qualifying applicants.in computer graduates,are forcing manybusinesses to look The median salary for beginning programmers in the United States is4offshore $51,700. For a team of 10 programmers, that is a half-million dollar annualinvestment. Add overhead, equipment and training, and the priceskyrockets. Outsourcing in the United States is even more costly. Rates canrange from $40 to $80 per hour, equating to between $83,200 and $166,400per year for each programmer.
Higher rates are compounded by fewer graduates. Universities are seeingmajor declines in the number of students majoring in computer science. Forexample, between the years 2000 and 2004, UCLA computer science5enrollment dropped 60 percent. In fact, the decline in college graduates in6IT-related fields is one of the most worrisome problems faced by CIOs.
Finding Offshore Programmers Is Challenging
Searching for offshore 7Offshoring to India is the number one choice for most American businesses.programmers is often a However, is India always the best source for programmers? Working withhit-or-miss proposition developers in Bangalore, India, "The local engineers would start a project,get a few months experience and then bolt for greener pastures," explained8Bill Wood of Ping Identity, an American Internet security software company.
2 King, R. (December 11, 2006). BusinessWeek. Outsourcing: Beyond Bangalore.3 Ibid.4 Salary.com. http://swz.salary.com/sa... [download for more]
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