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To: JBTFD who wrote (31209)	11/8/2003 9:59:38 PM
From: Lizzie Tudor	Respond to of 89467

oh yeah definitely 1-5 are cost related and only speak to whether it is worth it to offshore projects if cost is the objective. I'm sure that if you add up all offshore projects and cost them in total they are cheaper than US (my guess would be by 30-40%). But that is much different than the 70% originally thought. At a 40% ratio you then need to look at other alternatives, for example in some cases you can save 30% simply by outsourcing using a US provider. And then you have the reality of what this cost savings mean... for example if you can only offshore simple straightforward tasks and everything in house is of the "killer" variety in terms of skillset required, from a management standpoint it is going to be very difficult to staff that. And what about operations, for example one of the offshore projects we had fell apart one day, these things happen and it was 72 hours before it could be corrected, time lag again and access to staff. Had it been a US team we could have had them in within 24 hours. No resources left in the office to do the emergency fixes like this that might be required. All this stuff is being looked at now, it is a complicated equation.

To: JBTFD who wrote (31209)	11/9/2003 1:25:21 PM
From: Lizzie Tudor	Read Replies (2) \| Respond to of 89467

theres a lot of stuff in the paper on offshoring today. This really illustrates the problem imho. The consulting houses really overplay their hand in what kind of savings can be had, because of course they stand to benefit. Fantasy- this company is claiming 20% savings with an 8:1 ratio: Avinash Vashistha, managing director at San Ramon-based offshore consulting firm NeoIT, loves telling the story of asking a Silicon Valley executive this year which jobs he could offshore. ``Could you move this person's job?'' asked Vashistha. ``Oh, no,'' the executive said. ``I couldn't move her job. She's been here for 25 years. It would take eight people to do her job.'' ``Very well, we'll hire eight people to replace her,'' Vashistha said. NeoIT calculated that the company could hire eight people to replace that one longtime employee and still save 20 percent by moving the entire division overseas, Vashistha said. siliconvalley.com vs. reality The Hidden Costs of IT Outsourcing While moving software development and tech support offshore is all the rage, many companies find the overall savings aren't that great yahoo.businessweek.com It seems like the people making these grand claims about offshore cost savings are always in the business of providing consulting services. Offshore projects are like taking university courses over the internet. You can do it, it sortof works. But the results just aren't as good as the original.