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To: Jim Willie CB who wrote (31253)	11/9/2003 3:43:11 PM
From: Lizzie Tudor	Read Replies (3) \| Respond to of 89467

just read this businessweek article yahoo.businessweek.com As far as software projects, which is what I am familiar with, there are 2 ways to do development. Waterfall, this is where you produce a design and somebody codes it, and spiral which is where the functional and technical design work hand in hand. Honestly I have to say that 90% of software projects are actually spiral even if they call them waterfall. Technical issues come up and you have to adhere to the functional realities. Anyway without a true waterfall, the offshore model is more trouble than its worth, that is the problem. Your functional people are more expensive and harder to get than techies, this has always been true. The offshore model puts a strain on them, and you need more of them, plus the projects are slower by 30% just to deal with design issues. If you have ONE func resource and 8 offshore, and your func resource is 30% more expensive then the model works. But if you need 3 func resources here just because you need to spell out all this stuff you didn't before, and the project takes 30% more time you don't win with offshoring. This hard issue wrt local people being more strained and using up more of their time is why these 8:1 ratios are being erroneously tossed out by the offshorers. Its not that 8:1 is a reality in software, it is a sales pitch because that makes the model work. Software companies have tried to lower employee costs for YEARS. There was an outsourcing boom a few years ago where lots of companies tried to open up divisions in Texas vs. California. For the most part, these were failures. Oracle put a call center in Colorado but the bottom line is, if the marketing and R&D Leadership is not in the same place as the actual development, something is lost in the translation. This phase too, shall pass. Don't get me wrong- call centers and ops shops are going to india. But not all that people think is going there, no way. Some companies especially tech like applied materials and intel really want presence in India and China. That is their real motivation so they are setting up shop there to get into the market. But that is a growth motivator on the part of these companies. A different deal, and a subset of US firms, only the real multinationals.