Three Tampa Bay technology firms say that when it's done right, sending projects overseas can free up time, money and talent.
By KRIS HUNDLEY
Published June 4, 2004
TAMPA - Sending work overseas may be a political hot button, but executives with three Tampa Bay area technology companies say outsourcing can save money and time, while freeing stateside employees for higher-level responsibilities.
"But it's not a silver bullet," said Jeff Jones, director of software development for Utility Partners Inc. in Tampa. "If a project is in distress, sending it to 50 people who speak a different language on the other side of the world isn't going to help."
Jones was one of the presenters Tuesday at the Tampa Bay Technology Forum's breakfast on outsourcing, which included the co-founder and chief executive of Freeborders, a San Francisco company that operates a software outsourcing facility in southern China.
John Cestar said Freeborders, which started in 1999, does software work for 350 customers, including Target and DuPont. Though India is the big magnet for U.S. outsourcing, pulling in $10-billion in contracts last year, Cestar said China, with $1-billion in such contracts, is growing fast.
"China is 50 percent cheaper than India and Indian wages are rising fast," Cestar said. "And while the average coder in China does not speak English, the managers do."
During her career, Kathy Killingsworth has outsourced information technology work to both China and India. "We've found savings in China are a five-to-one ratio" compared to the United States, said Killingsworth, who is now a senior vice president with CommerceQuest in Tampa. "In India it's three-to-one."
Killingsworth, Jones of Utility Partners and Uri Minkoff, chief executive of Fortis Software, a Clearwater company that has a software development team in India, agreed that regardless of where the business is outsourced, success hinges on a few basics.
Start with a simple project. You can always sign another contract if you're satisfied with the work.
Be very specific about what you want, and use a very rigid methodology. Improvisation may work when you can look over a coder's shoulder, but not when they're halfway around the globe.
Agree on how you will formally communicate with the overseas team and resist sending distracting e-mails and phone calls to individual coders.
To protect your intellectual property, keep architectural and design work in-house. Freeborders' China operation guarantees that none of its coders will work on an entire product.
Don't forget to include such extra expenses as travel, visas or additional software licenses to the outsourcing budget.
CommerceQuest is currently working with Freeborders on a coding project in China.
Though CommerceQuest is satisfied with its outsourcing experience, Killingsworth said she never expects foreign workers to account for more than 20 percent of her company's workforce. Jones, of Utility Partners, said domestic workers should see outsourcing as a way to elevate their positions while moving drudge work overseas.
"But they'll still feel threatened," he said.
Cestar said most of Freeborders' customers are fast-growing companies that are creating jobs at home as well as abroad. But still he struggles with the reality of seeing highly educated Americans unable to find jobs in technology.
"In San Francisco, we see a lot of that and it seems a bit of a failure of the educational system," he said. "We've hired engineers as sales people. And while they'd rather be coding, this might be the best way to deploy their skills."
