Here’s a number I haven’t read before: the estimated count of US companies “effectively using India” as a source for outsourcing work is between 100 and 150, according to Tata Consuting Services president S. Ramadorai. He gave the approximation at a Sand Hill Group annual event Software 2005, covered online here.
That count is much smaller than I would have expected, given the attention we members of the media pay to the topic.
I also found this excerpt from the coverage of the show interesting:
Addressing a panel including an industry analyst, software CEO, and investment banker, Solidcore Systems CEO Rosen Sharma said that the benefits for companies less than three years old are limited. "For early startups, offshoring does not save money," he said.
Mark Sherman, general partner of venture firm Battery Ventures disagreed, saying vendors should consider the option once the development organization tops 30 – 40 people. "We very much encourage those companies to start pushing development offshore," he said, noting that of 25 active companies in their portfolio, roughly two-thirds are offshoring, with at least half receiving some degree of success, and only a handful having serious showstopper problems.
Among the major hurdles is communication of the need for timeliness. "There are few offshore companies that understand that cycle time is a critical part of the process," said Sharma, who said that if you save 30% of labor costs, but at the price of double the cycle time, the offshore idea isn't worth it.
More insights in the story.
