Everyone is doing it. Companies are having software developed in the Ukraine, and tested in Vietnam. Apparel is being made in China, and electronics are being assembled in Mexico. Mid-market companies, looking to emerge from No Man’s Land™, that phase for fast growth companies where they are too big to be small and too small to be big, ask, “If it’s good for Nike, Apple and Oracle, how can I make it work for me?”
Global sourcing is a huge and growing phenomenon across all industries, and while the discussion that follows is widely applicable whatever your market, the focus of this article is 
computer software.
The perceived advantages of going “Offshore” are usually identified as lower costs, access to resources, the ability to quickly ramp headcount up or down, and the opportunity to operate around the clock. All are good and valid reasons to consider this big step.
Reduced Labor Costs
Computer science professionals in developed markets are extremely expensive; $60-80K to start, well over $100K with relevant experience. It makes the $20-25 per hour rates for offshore developers and testers pretty attractive.
Access to Unique Skills
Recruiting and retaining professionals with the requisite skills, is time-consuming, and expensive. Utilizing the services of an offshore development organization can provide properly skilled professionals, while ensuring that your project complies with sophisticated development and QA methodologies.
Scalability
Whether you are building the next generation application, or upgrading an existing product, computer science projects are often of limited duration. Global sourcing can be an ideal way to quickly assemble a team to design, develop and test a solution of any size. And when the task has been successfully completed, the team can be quickly dispersed.
“Follow the Sun” Productivity
How do you most effectively add a second shift to your operation? The best answer may be to go global. When talking to executives who have offshore development partnerships, you often hear, “They write code while we sleep, we test it while they sleep”.
THE BIGGEST BENEFIT
Depending on the challenge you face and the nature of the product you are creating, you may see gains from any or all the above factors, but only if you get something else right in the first place. The offshoring highway is littered with the road-kill of thousands of failed efforts. Why do so many smart people, with sound reasons to go offshore not realize the benefits they seek? They underestimate the challenges of a completely new business model. No longer can they walk down to the cube where the code is being written or tested to check in and see how things are going. Management by Walking Around doesn’t work from 8,000 miles, and ten time zones away.
If you are like most emerging companies, you have succeeded because you have been flexible, able to adapt your product portfolio almost in real time as you receive feedback from your customers as to what features they like, or wish you provided. You are a winner because you have listened, learned and responded.
Many global software development partners are exceptional organizations, utilizing the finest and most proven technologies. They will build and deliver exactly what you ask for. And therein lies the problem. To be successful offshore, your requirements must be clear and well and consistently communicated. In addition, you must employ a disciplined project management process. Embracing these essential attributes--behavior that many emerging growth companies can master if they make it a top priority--will not only help assure a successful global sourcing strategy. It will also make your business sustainable and scalable.
