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Off Shoring

In: Business and Management

Submitted By Shug7
Words 618
Pages 3
Chapter 13
Off shoring, products have always been a topic of discussion among companies trying to maximize profit. This concept of doing business offshore has both pros and cons and all should be measured to determine what is best for the company both long term and short term.
One benefit of off shoring application development is the cheaper labor costs. At the inception of off shoring and outsourcing, supporters of this concept have always noted that lower labor costs will benefit a company with a higher profit margin. Countries that provide off shoring services to the United Stated do not have the higher over- head costs to operate because their employee labor market is significantly lower at cost per hour than employees in the United States are. Keeping in mind the lower labor costs, many companies see that software developers can utilize the same benefits of cheaper labor as other service areas to maximize profit and minimize costs.
Another benefit of off shoring application development provided by Clarety Consulting is the less production down time. In this article it is explains off shoring software development allows employees to work on site for 24 hours a day (Advantages & Disadvantages Sotware Developoment Outsourcing). The concept behind this approach to outsourcing is that with access to employees in various countries production on software never has to stop because in every country there is another time zone to begin and start the workday, thus allowing a faster production of products in this case the faster production of software.
Along with the many advantages of off shoring product development there is also a down side to off shoring software including the lack of skills produced by foreign workers. In many instances along with the lower costs of production there may also me a lack of quality that comes along with the lower costs. Many companies especially in the software industry have noted that the projected profit margin for off shoring software is often off set by the lack of skill of the employees in comparison to the works in the US.
Another disadvantage of off shoring is presented by John Miano in his article titled “Why Off shoring Software Development Will Fail” is that software developers need to be close in proximity to their users (Why Offshoring Software Development Will Fail). The need of software developers to be close to the users is because the developers and the user must work closely in designing the needs of the company. It has been evident in many cases where there have been communication break- downs between developers and users in the design process in the US, so once can imagine what could happen if production is in another country. One will be at risk again of not having the software needed to fulfill the company’s needs and can cost more in the long-run than if it had been purchased on shore.
In conclusion, it is evident that off shoring application development has both pros and cons. Some of the advantages include cheaper labor and less production downtime the disadvantages include: lack of skill among workers and the lack of communication between developers and users. When companies are considering off shoring software development it is crucially important that all pros and cons be measured so that the maximum profit of the company can be made.
Works Cited
Advantages & Disadvantages Sotware Developoment Outsourcing. (n.d.). Retrieved December 2, 2011, from Clarety: http://www.claretyconsulting.com/it/comments/advantages-disadvantages-software-development-outsourcing/2009-01-26/
Why Offshoring Software Development Will Fail. (n.d.). Retrieved December 2, 2011, from Dtatmation, Internet.Com: http://itmanagement.earthweb.com/entdev/article.php/3784616/Why-Offshoring-Software-Development-Will-Fail.htm

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