If you’ve read some of my prior posts (such as this one), you know that I believe that the market for software development talent is now a global market. That doesn’t mean that all development is moving offshore. But it means that we have a shortage of good people in the US and if your company is above a certain size and scale, you should consider using offshore resources due to cost, and also due to the availability of good resources offshore.
Assuming you’re convinced of a need to do some software development work offshore, where do you go? CIO’s are getting emails from random offshore service providers every week, if not every day, and it’s pretty difficult for them to distinguish among these providers. They’re all offering what seem to be similar services at similar prices. Normally when I approach a problem like this, I like to adopt some kind of framework to help me think about the problem.
Gartner has a framework for ranking the top destinations for offshore IT services. There are some things I don’t like about the Gartner framework. Analysts such as Gartner tend to be more focused on Business Process Outsourcing (BPO), rather than offshore software development. So my approach will be to start with the Gartner framework, but I’ll modify it to focus on the factors that are most important for creating an offshore development team of from, say, 20-100 people.
Let’s take a look at Gartner’s list of top 30 destinations for offshore services:
- Americas: Argentina, Brazil, Chile, Colombia, Costa Rica, Mexico, Panama and Peru.
- Asia/Pacific: Bangladesh, China, India, Indonesia, Malaysia, the Philippines, Sri Lanka, Thailand and Vietnam.
- Europe, the Middle East and Africa (EMEA): Bulgaria, the Czech Republic, Egypt, Hungary, Mauritius, Morocco, Poland, Romania, Russia, Slovakia, South Africa, Turkey and Ukraine.
If you are a Gartner subscriber, you can request individual reports on the various countries on Gartner’s list.
Let’s take a look at the countries on the list. It’s evident that some of these countries aren’t on the list due to their software development prowess. Bangladesh? Costa Rica? Panama? Peru? Seriously? None of these nations are creating great software developers, en masse. So maybe you could create a small team in one of those countries, but I don’t think it would scale beyond a few people. What about the Philippines? It’s a great option for BPO, due to the American-style English you can find there, and they have a large population, so one would certainly expect that at least some of them could be great software developers. But most people I talk to just don’t think the Philippines education system is world class at producing large quantities of strong developers. I had a chance to talk to a Philippines-based service provider recently, and while they felt they could provide good IT support resources (e.g., off-hours help desk), they shied away from the opportunity to bid on creating a large development team there.
Some of Gartner’s calls have been amazingly bad in the past. Back in December 2010, they announced their updated top 30 IT offshoring destinations, which included Egypt. EGYPT? YOU GUYS CAN”T BE SERIOUS! Not only is Egypt a political pressure cooker with an unclear future, but they shut down the bloody internet there for a few days back in 2011, just one month after making the Gartner list! What if you had some production problems and the key engineer you needed couldn’t be reached because the Internet was shut down? I think that’s enough to take Egypt off of your list, unless perhaps you are doing some work that’s specific to the Middle-East market.
Now, having had a little fun at Gartner’s expense, I should say that (by riding upon a client’s Gartner subscription) I had a chance to talk to a Gartner offshoring analyst about a client’s offshoring plans a few months ago. Gartner wouldn’t advise you to just blindly go to the #1 destination (which by the numbers was India). They view the list of top destinations as just a starting point to spur your thinking, just as we’re doing here on this blog. In my next post I’ll look at the factors that Gartner uses to grade the various countries, and I’ll critique some of these factors.