There are two terms to consider when it comes to outsourcing:

* Outsourcing your work
* Off-shoring your work

Often, they are interchangeable when it comes to software outsourcing for small companies. Most small business owners are concerned with cost associated with custom software development and often venture into online searches to find a cheap software developer. This often leads to an experience that goes something like the factious account below

Joe Smith owns a small business that needs a custom Web-based software to increase customer base (the lore of the worldwide customers on the Web) and perhaps help a customized work-flow that Joe has invented over the years building the business. Joe goes on a mission to find a local computer talent to help him out with this project. He searches online for local talents and ends up finding a lot of talents that are cheap and readily available to do the work on a 24/7 basis. Joe eventually clicks on a Web site full of promise to build anything and everything. The poor business owner is charmed to learn about the single digit hourly rate for programmers in India or Russia. Joe figures spending few hundred bucks to try it out is not so bad idea.

He issues a project to an off-shore software company that can do it all. Being business savvy and reasonably above-average intelligent Joe decides to scope out a small subset of his needs as the very first teaser project. It goes fairly well. Joe is now is excited and issues a bigger project to the firm far far away. Since the business owner is not well versed in software specification, the off-shore team assumes a lot on behalf of Joe. The delivered product — a complete expectation mismatch!

Joe withholds payments and the offshore agency pulls the support; both parties lose. The business owner is bitter about offshore developments and swears never to get involved again. The offshore agency salvages their lost income by reselling the core code to someone else if they can. This is a dreadful scenario that we have heard too many times from many customers who sign up for our HURT project support package. The key problems are as follows:

• Expectation mismatch due to undefined responsibility sharing model
• The business owner is a self-proclaimed software specifications and project management expert
• The offshore agency is eager to get paid in USD starts with whatever specifications is available and “assumes” rest of the missing spec
• The typical consultant mentality of the offshore agency is to create a “lock-in” and thus not being upfront about defining the real scope of the project makes the project least attractive to other development companies with higher standards