Sunday, January 23, 2005

Sending code offshore 'vital for profits' - ZDNet UK News

According to an ZDNet article ( Sending code offshore 'vital for profits' - ZDNet UK News ) using overseas developers can really boost the bottom line of software development companies.

Of course, if it really was that easy then everyone would be doing it. There are barriers, particularly for smaller companies. That's where companies such as Redland Software are unique: a small company with an offshore software development office.

Large companies often partner with companies in the offshore nation. This can save al ot of time and effort and energy building a bridgehead into the offshore country. However, it also reduces a certain degree of control.

Very large companies build their own offices offshore (e.g. IBM in India).

Interestingly, the article reports that the developers in the host company often find that their work improves and the less skilled work is shipped offshore. This once again means that software programmers in the US and Western Europe need to continue to 'upskill' and improve their value added if they are not to be lerft behind.

Tuesday, January 18, 2005

UK leads the way in offshore outsourcing

According to an article the UK leads the way in offshore outsourcing. That puts the UK ahead of other European nations with a predicted equivalent of 3% of the total workforce being outsourced by 2015.

Monday, January 17, 2005

The Skill Works

With every increasing demands on IT staff to deliver ever greater added-value and 'upskill' (see earlier article) it's good to know that the UK Government has a scheme which includes a subsidy for training.

The SkillWorks programme provided an 80% subsidy for training in certain areas of the country in 2004. This will decrease to 60% from March 2005 but it still represents a great opportunity for individuals to get vital and in-demand software skills.

The website provides all the info for this great value training programme.

Thursday, January 13, 2005

Outsourcing is good for your career -

Outsourcing is good for your career -

This article reports on research that the majority of staff are more satisfied in their jobs after outsourcing has come into effect. This is a positive comment on the outsourcing issue. However it misses one important point: the people 'left behind' after an outsourcing exercise might need to be re-trained.

It is only by offering added-value that a person protects himself from being 'outsourced'. This is hard (but not impossible) if you work in a call center, but everyone must keep 'upskilling'.

Offshore outsourcing software development really does benefit everyone, particularly customers and this in turn drives down costs and those lower costs filter back into the economy. It worked in steel making, textiles, electronics and it will work in the manufacture of software.

Tuesday, January 11, 2005

Upskilling - absolutley right

Upskilling is the key

It's not all doom and gloom for IT professionals. According to an article by Computing, the answer to the challenge of offshore outsourcing is upskilling Upskilling. This short article states that IT staff need to become more flexible, better skilled and quicker to spot opportunities.

Change is good

There is a theory that each techonological change creates more jobs than it destroys, which is probably true. Offshore outsourcing is here to stay. It brings lower costs, faster product development, more proto-typing (you can risk more when your cost base is lower) and also spreads the wealth around the globe a bit more.

Better Service

'Upskilled' IT professional can only be good news for local economies - their clients should see more responsive and creative suppliers and partners. And that can only be a good thing.

Sunday, January 09, 2005

Offshore development - the worldwide debate

It's interesting that companies from Western countries which benefit from Globalism tend to complain when the tide washes the other way. This is never more true than software development, where offshore programming shops offering low-cost, efficiency and high quality are causing concern verging on panic in some areas.

Software has some interesting features, for example:

1. It has zero raw materials (unless you count knowledge as a raw material ... Hmmm ... maybe it is!)

2. It has near zero delivery / transport costs (the cost of an internet connection)

These are not unique to software - other examples include any other digital product, information products, capital (maybe?).

Of course local companies have some advantages that offshore companies do not for example:

1. they are physically close to the customer
2. the client and developer work on the same time zone
3. Zero language barriers

A great mix is a local company with an offshore office. This arrangement can bring the peace of mind that comes from having someone close by to talk to and also the lower costs that come from offshore development.

Saturday, January 08, 2005

Travelling offshore

One factor of running a software development company in Liverpool with an offshore development office in Romania, is that you get to travel a lot.

Our software development office is located in Timisoara which is in the west of Romania. There are several ways to get there.

You could fly to Otopeni airport in Romania's capital city Bucharest and then get the train to Timisoara. However, the journey from the airport to the train station is a pain - the airport taxi drivers are agressive to say the least and charges are outrageously high. There is a cheap bus ride into town but this might be complicated if you can't speak any Romanian. You do need some Romanian to buy a train ticket. Watch out for the men and boys who try to 'help' you with your luggage outside the station. Some mean well but others just want your money. Bucharest Nord station is not very comfortable by Western standards (it was badly lit when I was last there, there were no platforms (literally) and it was very dirty) but I like its Eastern European atmosphere. There were stalls selling food and there is a McDonalds (if you must). The train journey to Timisoara is approximately 11 hours. Always travel first class in Romania and when possible it's cheap enough to take a sleeper carriage. Although train travel in Romania is very cheap and the trains are almost always on time (I don't want to sound un-Patriotic but that's more than you can say for the UK), there is a much better way to Timisoara.

The best route is to fly to the capital of Hungary Budapest and then by minibus to Timisoara. Flights from the UK to Budapest are frequent and getting cheaper all the time. I have been forced to fly from Manchester airport, changing planes most often in Germany or Holland. Manchester is a great airport but it's a 45 minute drive from Liverpool and it costs £50 or so for parking. There is now an airline flying direct from Liverpool airport to Budapest at incredibly low cost (well, half what I have paid in the past). It's ticket-less, you don't get a seat allocated and I guess they won't be offering bottles of wine on a £24.99 flight but it's a great deal (actually the return flight cost £4.99!). The airline is mentioned on the Liverpool Airport web site.

Once in Budapest you can go by train but, just like in Bucharest, this can be a painful experience. I travel to Timisoara by minibus. I organise it through a company called Recreation. At the moment it costs 35 Euros each way and although some of the drivers drive a bit too quickly for my liking, the vehicles are very comfortable. Sometimes you get to meet other people, often Romanians or Americans. The journey takes around 5 hours. Some of the route through Hungary is on motorway.

Alternatively Timisoara has it's own airport. Flights from Manchester to Timisoara are very expensive. Flights to Timisoara from London Heathrow are cheaper but you have to get to Heathrow and back (I did it by coach and it was not a pleasant experience - the over night coach drive was a really unpleasant experience). The cost of a taxi ride into town is about 7 Euros, which is lot given that the journey only takes about 20 minutes (the drive from Budapest takes around 5 hours and costs 35 Euros).

Friday, January 07, 2005

The Communication Challenge

Software Development Liverpool - Redland Software

The communication barriers between different cultures are greater than the language differences. There is a whole layer of meaning which cannot be taught, it has to be experienced.

The communication barrier is something that often causes problems with offshore outsourcing. We have sometimes struggled with this, particularly when the client is in direct contact with our Romanian team.

However, with time, it is possible to anticipate the potential barriers and do something about them.

For example it is sometimes useful to state a requirement in the positive (the field must only allow numerical data) and the negative (the field must not allow any non-numerical data). Furthermore, it is important to not make any assumptions about what words mean - the assumptions you could make with someone from your own country.

Thursday, January 06, 2005

Am I exporting British jobs?

This question is sometimes asked: aren't you just exporting British jobs? It's certainly an important question. There are numerous articles on the web discussing this issue e.g.,11280,34929,00.html

The short answer is 'yes' but that is far from the end of the answer - there are several factors to take into account and here are some, in no particular order:

Firstly, literally hundreds of thousands of British (and American, French, German etc) jobs have continually been exported all throughout the last century - I am thinking of textiles, steel, ship making etc.

Secondly, some jobs have out-priced themselves in the UK. I probably would not have started an IT business in the UK because the massive costs would have made it too risky, unless I had a really great idea.

Thirdly, pratcially ALL software used on PCs these days is made offshore - by Windows in the USA !

Who benefits from this? WE do - the consumers in the West: lower overseas costs cause the price of goods to fall. THEY do - the employees overseas - they get a little share of Western wealth.

The only people who should feel threatened by this are Western programmers who have no 'added value' services to offer an employer such as analysis, project management, training and of course the ability to find developers who cost less than half they do.

First steps

Many software companies are now looking to countries outside Western Europe and the USA for development resources. This is mainly due to lower costs. Scarce progamming skills is also a factor.

Our company Redland Software Limited operates from the wonderful Romanian city of Timisoara. Timisoara has two universities with IT / Computing departments. Also, several large companies have software departments there including Siemens, Alcatel and Solectron.

We initially started with Visual Basic and PHP development, but since then have evolved to using Microsoft .Net and Java.

Setting-up a company in a foreign country is not easy, particularly if you do not have the huge resources of a company like Alcatel or Siemens. There are many factors to take into account including the culture, the legal system, the language, travel there, the communications infrastructure etc. I worked through every one of these (and other) items and some of the issues are still on-going.

How it began

On my first trip to Romania (to assist on projects with orphans) I fell in love with the country. Perhaps it was the wonderful climate, or maybe the (mostly) friendly and generous people - who knows. Anyway I returned there several times and always enjoyed myself.

I decided that I wanted to have a good reason to stay working with Romania. I did some research into the IT industry in Romania and discovered that the IT guys there are very talented, hard working and well motivated. Also, the salaries are a lot lower than in the UK. So I decided to set up a software development company in Timisoara in western Romania.

It took a couple of years of hard work to get the software development team working well. For the first two years the business was run on a part-time basis. Now it is a full time activity for me. I formed Redland Software. 'Redland' has nothing to with Romania being a former Communist country (as in 'red' 'land') but is in fact the name of a nice district of my home town of Bristol.

More to come ...