Software Development and Outsourcing

Earlier this year, I went to India on behalf of a client that had outsourced their software development.  I met with architects, project managers, business analysts, testers and developers.  What they had to say about software development was astonishing, but revealing.

I have nothing against any country.  Outsourcing is not always bad and the worse reason to reject outsourcing is patriotism.  The reason outsourcing fails is because it is not profitable.

Say again?

That’s right outsourcing is not profitable.

So scratch that concept of less expensive software developers right from your brain.  Software requires knowledge of the work.  Not better documentation, not better analysts.  The problem is the way we have industrialized software development.

There are a number of things that don’t work in traditional software development.  Prepackaged and turn-key systems sold to customers ignore the existing system customers have in place.  There is no study of customer purpose or the customer demands placed on systems.  Instead the “better” IT system is put into place.  It is the ignorant selling the plausible to the gullible.

Further, the flow of the work is not considered or if it is considered it is automated in an inefficient or as-is fashion.  Sometimes the existing functionally separated systems are perpetuated.  No one asks if the back office needs to exist, often it can be designed out and this does not require software.

Others treat software development as manufacturing.  You hear such words as “software factory” and “production line.”  Software development couldn’t be any more different than manufacturing.  However, it has been designed with different functions, where we can than outsource the pieces like testing or development.  Economies of scale gained through optimizing the pieces and lowering costs by lowering salaries.

It just doesn’t work that way or certainly doesn’t work this way very well.  But organizations continue to follow this path to its failed destiny.  Project overruns, exploding costs for IT development, late projects and software that doesn’t work or entraps workers with poor flow.  The price of admission for this privilege is expensive.  Sign me up.

Oh, and what did that conversation with the outsourcing company produce as its biggest problem in our conversations.  They could do a much better job of developing software if they could come and see the work.

Why did you outsource again?

Tripp Babbitt is a speaker, blogger and consultant to service industry (private and public).  His organization helps executives find a better way to make the work work.  Read his articles at Quality Digest and his column for  Learn more about the 95 Method for service organizations.  Reach him on Twitter at LinkedIn at

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