Software Sweatshop

So you found developers on the other side of the globe willing to do work for half the price... great. But what do you do when something goes wrong? What if your vendor does something malicious or incompetent and disappears? That's why finding a trusted local development partner is so critical. If they have an offshore presence, that's great... they should deal with the offshore team, not you. 

The following horror story came from Jack D. Deal's blog

"[Joe] said he had the bright idea of going offshore to India to get a cheaper deal on an e-commerce website design. He did contract with an Indian firm for a little less than half what a Silicon Valley e-commerce designer would charge.

Joe paid the full amount by credit card before the work had begun. Mistake number one but for Joe it was 'cheap'; it wasn't even for him a matter of price vs. cost. For almost two months they strung him along but in the end produced nothing and refused to return his money."

The reality is that most people that send software development work offshore aren't happy. People that use project bidding sites will tell you that finding a good vendor is really hit or miss. What's worse is when the "buyers" aren't technical and assume that the developers know exactly what they want. If you want to go offshore, you need to find a company with a local presence, if for no other reason than the 'throat to choke' factor. There are 3 main reasons a local presnce matters:

1). Security: A local company will be accountable by local law to any NDA's or other IP protection agreements you sign. Even if the offshore team bails on you, you still have some recourse. Did you know that contracts signed with foreign companies are not enforceable unless they enter the US postal system? So if you sign a contract with an offshore vendor and send it via fax or email it's very hard to enforce (true story, one of clients told us this and asked both me and my partner in Pakistan to sign the contract and mail it to him)

2). Process: Companies with a local presence and offshore software development center have nailed down a process of working with the end client and managing the delivery of the work on the backend. Doing this yourself is time-consuming and difficult. We typically talk with our North American clients during the day to review work we've done or further gather requirements. The 24/7 model works very well for us, but it's been a difficult process to hammer out and requires a lot of hardwork from our developers and project managers.

3). Communication: A company with a local presence should be able to stay in constant communcation with you. Due to the inherent latency in offshore development, it's critical to have someone you can talk to easily. It's easy to underestimate this, but communication failures are the biggest IT project killers; whether they're onsite or offshore.